Activation of b-catenin, the intracellular mediator of canonical Wnt signaling, has a critical role in mediating podocyte injury and proteinuria. However, the underlying mechanisms remain poorly understood. Here, we show that b-catenin triggers ubiquitin-mediated protein degradation of Wilms' tumor 1 (WT1) and functionally antagonizes its action. In mice injected with adriamycin, WT1 protein was progressively lost in glomerular podocytes at 1, 3, and 5 weeks after injection. Notably, loss of WT1 apparently did not result from podocyte depletion but was closely associated with upregulation of b-catenin. This change in WT1/ b-catenin ratio was accompanied by loss of podocyte-specific nephrin, podocalyxin, and synaptopodin and acquisition of mesenchymal markers Snail1, a-smooth muscle actin, and fibroblast-specific protein 1. In vitro, overexpression of b-catenin induced WT1 protein degradation through the ubiquitin proteasomal pathway, which was blocked by MG-132. WT1 and b-catenin also competed for binding to common transcriptional coactivator CREB-binding protein and mutually repressed the expression of their respective target genes. In glomerular miniorgan culture, activation of b-catenin by Wnt3a repressed WT1 and its target gene expression. In vivo, blockade of Wnt/b-catenin signaling by endogenous antagonist Klotho induced WT1 and restored podocyte integrity in adriamycin nephropathy. These results show that b-catenin specifically targets WT1 for ubiquitin-mediated degradation, leading to podocyte dedifferentiation and mesenchymal transition. Our data also suggest that WT1 and b-catenin have opposing roles in podocyte biology, and that the ratio of their expression levels dictates the state of podocyte health and disease in vivo.