Wnt signaling plays important roles in both the tumor-induced angiogenesis and tumorigenesis through the transcriptionally active nuclear β-catenin. Recently, c-Cbl was identified as a unique E3 ubiquitin ligase targeting the active nuclear β-catenin. However, little is known about the molecular mechanisms by which c-Cbl regulates ubiquitination and degradation of active β-catenin. Here, we demonstrate that Wnt activation promotes the phosphorylation of c-Cbl at tyrosine 731(Tyr-731), which increases c-Cbl dimerization and binding to β-catenin. Tyr-731 phosphorylation and dimerization mediate c-Cbl nuclear translocation and lead to the degradation of nuclearly active β-catenin in the Wnt-on phase. c-Cbl activation also inhibits expression of the pro-angiogenic Wnt targets, IL-8 and VEGF. Phospho-Tyr-731-inactive mutant c-Cbl (Y731F) enhances and phosphomimetic mutant c-Cbl (Y731E) suppresses angiogenesis in zebrafish. Taken together, we have identified a novel mechanism for the regulation of active nuclear β-catenin by c-Cbl and its critical role in angiogenesis. This mechanism can be further explored to modulate both the pathological angiogenesis and the tumorigenesis.