Dishevelled (Dsh) is required for the specification of cell fate and polarity by secreted Wnt proteins. Frodo, a novel conserved Dsh-binding protein, synergized with Xenopus Dsh (XDsh) in secondary axis induction in Xenopus laevis embryos. A dominant inhibitory construct and antisense oligonucleotide-mediated depletion of Frodo inhibited axial development in response to XDsh and XWnt8, and suppressed transcriptional activation of a reporter construct. At later embryonic stages, both dominant negative Frodo and antisense oligonucleotides interfered with the expression of regional neural markers and caused eye deficiencies, indicating that Frodo is required for normal eye and neural tissue development. Full-length Frodo RNA suppressed these loss-of-function phenotypes, attesting to their specificity. These findings establish a function for Frodo as an essential positive regulator of Wnt signalling.