LDL receptor-related protein 6 (LRP6) is a Wnt coreceptor in the canonical signaling pathway, which plays essential roles in embryonic development. We demonstrate here that wild-type LRP6 forms an inactive dimer through interactions mediated by epidermal growth factor repeat regions within the extracellular domain. A truncated LRP6 comprising its transmembrane and cytoplasmic domains is expressed as a constitutively active monomer whose signaling ability is inhibited by forced dimerization. Conversely, Wnts are shown to activate canonical signaling through LRP6 by inducing an intracellular conformational switch which relieves allosteric inhibition imposed on the intracellular domains. Thus, Wnt canonical signaling through LRP6 establishes a novel mechanism for receptor activation which is opposite to the general paradigm of ligand-induced receptor oligomerization.