Wnts and Hedgehogs (Hh) are large, lipid-modified extracellular morphogens that play key roles in embryonic development and stem cell proliferation of Metazoa. Both morphogens signal through heptahelical Frizzled-type receptors of the G-Protein Coupled Receptor family and there are several other similarities that suggest a common evolutionary origin of the Hh and Wnt pathways. There is evidence that the secreted protein, Wnt inhibitory factor 1 (WIF1) modulates the activity of both Wnts and Hhs and may thus contribute to the intertwining of these pathways. In this article, we review the structure, evolution, molecular interactions and functions of WIF1 with major emphasis on its role in carcinogenesis.