Epigenetic silencing of secreted wingless-type (Wnt) antagonists through hypermethylation is associated with tobacco smoking and with invasive bladder cancer. The secreted Wnt inhibitory factor-1 (WIF1) has shown consistent growth-inhibitory effect on various cancer cell lines. Therefore,we assessed the mechanisms of action of WIF1 by either restoring WIF1 expression in invasive bladder cancer cell lines (T24 and TSU-PR1) or using a recombinant protein containing functional WIF1 domain. Both ectopic expression of WIF1 and treatment with WIF1 domain protein resulted in cell growth inhibition via G 1 arrest. The G 1 arrest induced by WIF1 is associated with down-regulation of SKP2 and c-myc and up-regulation of p21/WAF1 and p27/Kip1. Conversely,reexpression of SKP2 in WIF1-overexpressing TSU-PR1 cells attenuated the WIF1-induced G 1 arrest. Furthermore,inhibition of nuclear Wnt signaling by either dominant-negative LEF1 or short hairpin RNA of TCF4 also reduced SKP2 expression. The human SKP2 gene contains two TCF/LEF1 consensus binding sites within the promoter. Chromatin immunopre-cipitation/real-time PCR analysis revealed that both WIF1 and dominant-negative LEF1 expression decreased the in vivo binding of TCF4 and β-catenin to the SKP2 promoter. Together,our results suggest that mechanisms of WIF1-induced G 1 arrest include (a) SKP2 down-regulation leading to p27/Kip1 accumulation and (b) c-myc down-regulation releasing p21/WAF1 transcription. Additionally,we show that WIF1 inhibits in vivo bladder tumor growth in nude mice. These observations suggest a mechanism for transformation of bladder epithelium on loss of WIF1 function and provide new targets such as SKP2 for intervention in WIF1-deficient bladder cancer.