Wnt/β-catenin signalling is aberrantly activated in most colorectal cancer (CRC) and is one key driver involved in the initiation and progression of CRC. However, mutations of APC gene in CRC patients retain certain activity of APC protein with decreased β-catenin signalling and DKK4 expression significantly upregulates and represses Wnt/β-catenin signalling in human CRC tissues, suggesting that a precisely modulated activation of the Wnt/β-catenin pathway is essential for CRC formation and progression. The underlying reasons why a specifically reduced degree, not a fully activating degree, of β-catenin signalling in CRC are unclear. Here, we showed that a soluble extracellular inhibitor of Wnt/β-catenin signalling, DKK4, is an independent factor for poor outcomes in CRC patients. DKK4 secreted from CRC cells inactivates β-catenin in fibroblasts to induce the formation of stress fibre-containing fibroblasts and myofibroblasts in culture conditions and in mouse CRC xenograft tissues, resulting in restricted expansion in tumour masses at primary sites and enhanced CRC metastasis in mouse models. Reduced β-catenin activity by a chemical inhibitor MSAB promoted the CRC metastasis. Our findings demonstrate why reduced β-catenin activity is needed for CRC progression and provide a mechanism by which interactions between CRC cells and stromal cells affect disease promotion.© 2024. The Author(s).