We have recently reported the chondrogenic effect of bone morphogenetic protein-2 (BMP-2) in high density cultures of the mouse multipotent mesenchymal C3H10T1/2 cell line and have shown the functional requirement of the cell-cell adhesion molecule N-cadherin in BMP-2-induced chondrogenesis in vitro (Denker, A. E., Nicoll, S. B., and Tuan, R. S. (1995) Differentiation 59, 25-34; Haas, A. R., and Tuan, R. S. (1999) Differentiation 64, 77-89). Furthermore, BMP-2 treatment also results in an increased protein level of beta-catenin, a known N-cadherin-associated Wnt signal transducer (Fischer, L., Haas, A., and Tuan, R. S. (2001) Signal Transduction 2, 66-78), suggesting functional cross-talk between the BMP-2 and Wnt signaling pathways. We have observed previously that BMP-2 treatment up-regulates expression of Wnt-3A in high density cultures of C3H10T1/2 cells. To assess the contribution of Wnt-3A to BMP-2-mediated chondrogenesis, we have generated C3H10T1/2 cell lines overexpressing Wnt-3A and various forms of glycogen synthase kinase-3beta (GSK-3beta), an immediate cytosolic component of the Wnt signaling pathway, and examined their response to BMP-2. We show that overexpression of either Wnt-3A or kinase-dead GSK-3beta enhances BMP-2-mediated chondrogenesis. Furthermore, Wnt-3A overexpression results in decreases in both N-cadherin and GSK-3beta protein levels, whereas Wnt-3A as well as kinase-dead GSK-3beta overexpression increase total and nuclear levels of both beta-catenin and LEF-1. Direct cross-talk between Wnts and BMP-2 was also indicated by the up-regulated interaction between beta-catenin and SMAD-4 in response to BMP-2. These results suggest that Wnt-3A acts in a manner opposite to that of other Wnts, such as Wnt-7A, which were previously identified as inhibitory to chondrogenesis, and is the first BMP-2-regulated, chondrogenesis-enhancing member of the Wnt family.