Glycogen synthase kinase 3beta (GSK3beta) is an essential protein kinase that regulates numerous functions within the cell. One critically important substrate of GSK3beta is the microtubule-associated protein tau. Phosphorylation of tau by GSK3beta decreases tau-microtubule interactions. In addition to phosphorylating tau, GSK3beta is a downstream regulator of the wnt signaling pathway, which maintains the levels of beta-catenin. Axin plays a central role in regulating beta-catenin levels by bringing together GSK3beta and beta-catenin and facilitating the phosphorylation of beta-catenin, targeting it for ubiquitination and degradation by the proteasome. Although axin clearly facilitates the phosphorylation of beta-catenin, its effects on the phosphorylation of other GSK3beta substrates are unclear. Therefore in this study the effects of axin on GSK3beta-mediated tau phosphorylation were examined. The results clearly demonstrate that axin is a negative regulator of tau phosphorylation by GSK3beta. This negative regulation of GSK3beta-mediated tau phosphorylation is due to the fact that axin efficiently binds GSK3beta but not tau and thus sequesters GSK3beta away from tau, as an axin mutant that does not bind GSK3beta did not inhibit tau phosphorylation by GSK3beta. This is the first demonstration that axin negatively affects the phosphorylation of a GSK3beta substrate, and provides a novel mechanism by which tau phosphorylation and function can be regulated within the cell.