Wingless (Wg)/Wnt has been proposed to exert various functions as a morphogen depending on the levels of its signalling. Therefore, not just the concentration of Wg/Wnt, but also the responsiveness of Wg/Wnt-target cells to the ligand, must have a crucial function in controlling cellular outputs. Here, we show that a balance of ubiquitylation and deubiquitylation of the Wg/Wnt receptor Frizzled determines the cellular responsiveness to Wg/Wnt both in mammalian cells and in Drosophila, and that the cell surface level of Frizzled is regulated by deubiquitylating enzyme UBPY/ubiquitin-specific protease 8 (USP8). Although ubiquitylated Frizzled underwent lysosomal trafficking and degradation, UBPY/USP8-dependent deubiquitylation led to recycling of Frizzled to the plasma membrane, thereby elevating its surface level. Importantly, a gain and loss of UBPY/USP8 function led to up-and down-regulation, respectively, of canonical Wg/Wnt signalling. These results unveil a novel mechanism that regulates the cellular responsiveness to Wg/Wnt by controlling the cell surface level of Frizzled. The EMBO Journal (2010) 29, 2114-2125. doi:10.1038/emboj.2010.100; Published online 21 May 2010