The molecular events that drive Wnt-induced regulation of glycogen synthase kinase 3 (GSK-3) activity are poorly defined. In this study, we found that protein kinase C (PKC) and GSK-3 interact mainly in colon cancer cells. Wnt stimulation induced a rapid GSK-3 redistribution from the cytoplasm to the nuclei in malignant cells and a transient PKC-mediated phosphorylation of GSK-3 at a different site from serine 9. In addition, while Wnt treatment induced a decrease in PKC-mediated phosphorylation of GSK-3 in nonmalignant cells, in malignant cells, this phosphorylation was increased. Pharmacological inhibition and small interfering RNA (siRNA)-mediated silencing of PKC abolished all of these effects, but unexpectedly, it also abolished the constitutive basal activity of GSK-3. In vitro activity assays demonstrated that GSK-3 phosphorylation mediated by PKC enhanced GSK-3 activity. We mapped Ser147 of GSK-3 as the site phosphorylated by PKC, i.e., its mutation into alanine abolished GSK-3 activity, resulting in -catenin stabilization and increased transcriptional activity, whereas phosphomimetic replacement of Ser147 by glutamic acid maintained GSK-3 basal activity. Thus, we found that PKC phosphorylates GSK-3 at Ser147 to maintain its constitutive activity in resting cells and that Wnt stimulation modifies the phosphorylation of Ser147 to regulate GSK-3 activity in opposite manners in normal and malignant colon cells.