Limb-bud and heart (LBH) is a novel key transcriptional regulator of vertebrate development. However, the molecular mechanisms upstream of LBH and its role in adult development are unknown. Here we show that in epithelial development, LBH expression is tightly controlled by Wnt signaling. LBH is transcriptionally induced by the canonical Wnt pathway, as evident by the presence of conserved functional T-cell factor (TCF)/lymphoid enhancer-binding factor (LEF) binding sites in the LBH locus and rapid beta-catenin-dependent upregulation of endogenous LBH by Wnt3a. In contrast, LBH induction by Wnt/beta-catenin signaling is inhibited by Wnt7a, which in limb development signals through a noncanonical pathway involving Lmx1b. Furthermore, we show that LBH is aberrantly overexpressed in mammary tumors of mouse mammary tumor virus (MMTV)-Wnt1-transgenic mice and in aggressive basal subtype human breast cancers that display Wnt/beta-catenin hyperactivation. Deregulation of LBH in human basal breast cancer appears to be Wnt/beta-catenin dependent, as DKK1 and Wnt7a inhibit LBH expression in breast tumor cells. Overexpression studies indicate that LBH suppresses mammary epithelial cell differentiation, an effect that could contribute to Wnt-induced tumorigenesis. Taken together, our findings link LBH for the first time to the Wnt signaling pathway in both development and cancer and highlight LBH as a potential new marker for therapeutically challenging basal-like breast cancers.