In Xenopus, an asymmetric distribution of Wnt activity that follows cortical rotation in the fertilized egg leads to the dorsal-ventral (DV) axis establishment. However, how a clear DV polarity develops from the initial difference in Wnt activity still remains elusive. We report here that the Teashirt-class Zn-finger factor XTsh3 plays an essential role in dorsal determination by enhancing canonical Wnt signaling. Knockdown of the XTsh3 function causes ventralization in the Xenopus embryo. Both in vivo and in vitro studies show that XTsh3 substantially enhances Wnt signaling activity in a beta-catenin-dependent manner. XTsh3 cooperatively promotes the formation of a secondary axis on the ventral side when combined with weak Wnt activity, whereas XTsh3 alone has little axis-inducing ability. Furthermore, Wnt1 requires XTsh3 for its dorsalizing activity in vivo. Immunostaining and protein analyses indicate that XTsh3 is a nuclear protein that physically associates with beta-catenin and efficiently increases the level of beta-catenin in the nucleus. We discuss the role of XTsh3 as an essential amplifying factor of canonical Wnt signaling in embryonic dorsal determination.