The present invention is directed a Lef1/.beta.-catenin-dependent reporter and to transgenic fish containing this reporter. The present invention is also directed to the use of the reporter and the transgenic fish as a model for the .beta.-catenin signaling pathway. The model is useful for identifying genes in the .beta.-catenin signaling pathway and for identifying drugs that can modulate the .beta.-catenin signaling pathway. Such drugs are useful for treating or preventing melanoma, colorectal cancer and osteoporosis, among other disease conditions.