The canonical Wnt signalling pathway plays critical roles in embryonic muscle development and adult stem cell-mediated muscle repair. The core effectors of this pathway are TCF/LEF factors and beta-catenin that together bind to Wnt target genes and transduce transcriptional responses. Exactly how Wnt signals integrate with muscle specific regulatory factors is poorly understood. Several studies have shown that the homeobox proteins Barx2 and Pax7 are key regulators of muscle stem cell (satellite cell) proliferation and differentiation in vitro and in vivo. We now identify Barx2 and Pax7 as novel components of the Wnt effector complex, providing a new molecular pathway for regulation of muscle growth and repair. Barx2 activates a synthetic Wnt target gene (Topflash) in myoblasts alone, synergistically with Wnt3a, and synergistically with the muscle regulatory factor MyoD. TCF/LEF factor Lef1 can enhance both beta-catenin and Barx2-mediated activation, whilst other members of the TCF/LEF family are inhibitory, suggesting specific roles for TCF/LEF members in Wnt target gene regulation. In contrast to Barx2, Pax7 represses the Wnt reporter gene and antagonizes the activating effect of both beta-catenin and Barx2. Barx2 and beta-catenin can physically interact as demonstrated by co-immunoprecipitation. Pax7 can also bind beta-catenin, suggesting that Barx2 and Pax7 may compete for interaction with the core Wnt effector complex. Moreover, we have now identified endogenous genes that appear to be targets of both Barx2 and canonical Wnt signals in C2C12 myoblasts. For example, Barx2 and Wnt3a synergistically upregulated the well-characterized canonical Wnt target Axin2, and were antagonistic in regulation of the Myf5 gene. Chromatin immunoprecipitation analysis has demonstrated that beta-catenin and Barx2 are present on both an integrated Topflash promoter and the endogenous Myf5 enhancer following expression of Barx2 and MyoD in C2C12 cells. Overall, the data show for the first time that Barx2, Pax7 and MyoD can act as direct transcriptional effectors of Wnt signals in myoblasts, mediating transcription of canonical Wnt targets such as Axin2 and Myf5.