Wnt/β-catenin signaling is a highly conserved pathway essential for embryogenesis and tissue homeostasis. However, deregulation of this pathway can initiate and promote human malignancies, especially of the colon and head and neck. Therefore, Wnt/β-catenin signaling represents an attractive target for cancer therapy. We performed high-throughput screening using AlphaScreen and ELISA techniques to identify small molecules that disrupt the critical interaction between β-catenin and the transcription factor TCF4 required for signal transduction. We found that compound LF3, a 4-thioureido-benzenesulfonamide derivative, robustly inhibited this interaction. Biochemical assays revealed clues that the core structure of LF3 was essential for inhibition. LF3 inhibited Wnt/β-catenin signals in cells with exogenous reporters and in colon cancer cells with endogenously high Wnt activity. LF3 also suppressed features of cancer cells related to Wnt signaling, including high cell motility, cell-cycle progression, and the overexpression of Wnt target genes. However, LF3 did not cause cell death or interfere with cadherin-mediated cell-cell adhesion. Remarkably, the self-renewal capacity of cancer stem cells was blocked by LF3 in concentration-dependent manners, as examined by sphere formation of colon and head and neck cancer stem cells under nonadherent conditions. Finally, LF3 reduced tumor growth and induced differentiation in a mouse xenograft model of colon cancer. Collectively, our results strongly suggest that LF3 is a specific inhibitor of canonical Wnt signaling with anticancer activity that warrants further development for preclinical and clinical studies as a novel cancer therapy.