Cultured mouse D3 embryonic stem (ES) cells differentiating into embryoid bodies (EBs) expressed several Wnt isoforms, nearly all isotypes of the Wnt receptor Frizzled and the Wnt/Dickkopf (Dkk) co-receptor low-density lipoprotein receptor-related protein (LRP) type 5. A 4-day treatment with retinoic acid (RA), which promoted neural differentiation of EBs, substantially increased the expression of the Wnt antagonist Dkk-1, and induced the synthesis of the Wnt/Dkk-1 co-receptor LRP6. Recombinant Dkk-1 applied to EBs behaved like RA in inducing the expression of the neural markers nestin and distal-less homeobox gene (Dlx-2). Recombinant Dkk-1 was able to inhibit the Wnt pathway, as shown by a reduction in nuclear β-catenin levels. Remarkably, the antisense- or small interfering RNA-induced knockdown of Dkk-1 largely reduced the expression of Dlx-2, and the neuronal marker β-III tubulin in EBs exposed to RA. These data suggest that induction of Dkk-1 and the ensuing inhibition of the canonical Wnt pathway is required for neural differentiation of ES cells.