Tumours of the Ewing family, which comprise Ewing's sarcoma and peripheral primitive neuroectodermal tumours, are highly aggressive and mostly affect children and adolescents. They are characterized by chromosomal translocations leading to the generation of fusion proteins between EWS (or very rarely FUS) and members of the E-twenty-six (ETS) family of transcription factors that are capable of transforming cells. EWS/FLI1, the most frequent fusion, is thought to cause transformation through activation or repression of specific target genes. We present evidence demonstrating that the Wnt inhibitor and beta-catenin/T-cell factor (TCF)-responsive gene DICKKOPF-1 (DKK-1) is a transcriptional target of EWS/FLI1, which can inhibit both basal and beta-catenin-induced transactivation of the DKK-1 promoter. Moreover, our data indicate that EWS/FLI1 has a more general effect on beta-catenin/TCF-mediated transcription since it can block transactivation of a consensus beta-catenin/TCF reporter construct. Consistently, Ewing tumour cells expressing different EWS/ETS translocations cannot engage beta-catenin/TCF-dependent transcription, whereas silencing of EWS/FLI1 restores beta-catenin responsiveness in A673 and RD-ES Ewing tumour cells. Accordingly, gene set enrichment analysis shows that beta-catenin/TCF target genes are significantly enriched among genes downregulated by EWS/FLI1 in the Ewing cell line A673. Mechanistically, the inhibitory effect of EWS/FLI1 can be overcome by a constitutively active TCF4 protein (TCF4-VP16). Moreover, EWS/FLI1 binds lymphoid enhancer factor 1, a TCF family member, and interferes with its binding to beta-catenin, which could explain its negative effect on beta-catenin/TCF-mediated transcription. Our results show that EWS/FLI1 inhibits both DKK-1 expression as well as beta-catenin/TCF-dependent transcription, which could contribute to progression of tumours of the Ewing family.