Constitutive activation of the Wnt/beta-catenin pathway has been implicated as the primary cause of colon cancer. However, the major transducers of Wnt signaling in the intestine, T-cell factor 1 (TCF-1) and TCF-4, have opposing functions. Knockout of TCF-4 suppresses growth and maintenance of crypt stem cells, whereas knockout of TCF-1 leads to adenomas. These phenotypes suggest that TCF-4 is Wnt-promoting, whereas TCF-1 acts like a tumor suppressor. Our study of TCF expression in human colon crypts reveals a mechanistic basis for this paradox. In normal colon cells, a dominant-negative isoform of TCF-1 (dnTCF-1) is expressed that is equally distributed between nuclear and cytoplasmic compartments. In colon cancer cells, TCF-1 is predominantly cytoplasmic. Localization is because of active nuclear export and is directed by an autocrine-acting Wnt ligand that requires Ca2+/calmodulin-dependent kinase II (CaMKII) activity for secretion and a downstream step in the export pathway. TCF-4 remains nuclear; its unopposed activity is accompanied by downregulation of dnTCF-1 and increased expression of full-length isoforms. Thus, the dnTCF-1 and TCF-4 balance is corrupted in cancer by two mechanisms, a Wnt/CaMKII kinase signal for nuclear export and decreased dnTCF-1 expression. We propose that dnTCF-1 provides homeostatic regulation of Wnt signaling and growth in normal colon, and the alterations in nuclear export and promoter usage contribute to aberrant Wnt activity in colon cancer.