LDL‐receptor related proteins 5 and 6 (LRP5/6) are co‐receptors of Frizzled receptors that mediate Wnt‐induced activation of the transcription factor family TCF/LEF‐1. Even though LRP5 and LRP6 are highly homologous, LRP6, but not LRP5, is expressed primarily in the nervous system and deletion of the LRP6 gene results in significant brain abnormalities, while deletion of LRP5 results in primarily decreased bone density. Additionally, the exact function of LRP5 and LRP6 have not been clearly defined, although it is clear that they both play key roles in the Wnt canonical pathway. In this study the role of the intracellular domains of LRP5/6 in mediating Wnt signaling was examined. In the absence of exogenous Wnt 3a, full‐length (FL) LRP6, but not LRP5, increased TCF/LEF‐1 transcriptional activity, however both significantly potentiated Wnt 3a‐induced TCF/LEF‐1 activation. In contrast to the findings with the FL constructs, the intracellular domains (membrane‐anchored and cytosolic) of both LRP5 and LRP6 significantly increased TCF/LEF‐1 activation in the absence of Wnt 3a, and potentiated the Wnt 3a‐induced decrease in β‐catenin phosphorylation, increase in free β‐catenin levels and the increase in TCF/LEF‐1 activity. These findings demonstrate that: (1) LRP5 and LRP6 differentially modulate TCF/LEF‐1 activation in the absence of Wnt 3a and (2) the intracellular C‐terminal domains of LRP5/6 potentiate Wnt 3a‐induced TCF/LEF‐1 activation whether or not they are membrane‐anchored. These findings provide significant new insights into the roles of LRP5/6 in modulating canonical Wnt signaling. © 2005 Wiley‐Liss, Inc.