Tgfbi, a fasciclin family extracellular matrix protein, has various roles in human diseases from corneal dystrophies to cancer. However, the molecular mechanisms that underlie its functions are poorly understood. Here, we studied the role of Tgfbi during Xenopus embryogenesis. During gastrulation and immediately after, Xtgfbi is expressed at developmentally important signaling centers including the dorsal marginal zone, notochord and floorplate. Xtgfbi knockdown by anti-sense morpholinos causes defective organizer induction, patterning and differentiation of muscle, neuron and neural crests, similar to suppression of canonical Wnt signaling. In Xenopus embryos and animal caps as well as DLD-1 cells, we show that Tgfbi is strongly required for the full activation of the canonical Wnt pathway by promoting phosphorylation of GSK3β and consequently enhancing the stabilization and nuclear localization of β-catenin. Further analysis shows that Tgfbi is likely to promote GSK3β phosphorylation through integrin-linked kinase.