Dishevelled (Dsh) induces a secondary axis and can translocate to the membrane when activated by Frizzleds; however, dominant-negative approaches have not supported a role for Dsh in primary axis formation. We demonstrate that the Dsh protein is post-translationally modified at the dorsal side of the embryo: timing and position of this regulation suggests a role of Dsh in dorsal-ventral patterning in Xenopus. To create functional links between these properties of Dsh we analyzed the influence of endogenous Frizzleds and the Dsh domain dependency for these characteristics. Xenopus Frizzleds phosphorylate and translocate Xdsh to the membrane irrespective of their differential ectopic axes inducing abilities, showing that translocation is insufficient for axis induction. Dsh deletion analysis revealed that axis inducing abilities did not segregate with Xdsh membrane association. The DIX region and a short stretch at the N-terminus of the DEP domain are necessary for axis induction while the DEP region is required for Dsh membrane association and its phosphorylation. In addition, Dsh forms homomeric complexes in embryos suggesting that multimerization is important for its proper function.