Thrombospondins (TSPs) are multidomain glycoproteins with complex matricellular functions in tissue homeostasis and remodeling. We describe a novel role of TSP as a Wnt signaling target in the basal eumetazoan Hydra. Proteome analysis identified Hydra magnipapillata TSP (HmTSP) as a major component of the cnidarian mesoglea. In general, the domain organization of cnidarian TSPs is related to the pentameric TSPs of bilaterians, and in phylogenetic analyses cnidarian TSPs formed a separate clade of high sequence diversity. HmTSP expression in polyps was restricted to the hypostomal tip and tentacle bases that harbor Wnt-regulated organizer tissues. In the hypostome, HmTSP- and Wnt3-expressing cells were identical or in close vicinity to each other, and regions of ectopic tentacle formation induced by pharmacological β-Catenin activation (Alsterpaullone) corresponded to foci of HmTSP expression. Chromatin immunoprecipitation (ChIP) confirmed binding of Hydra TCF to conserved elements in the HmTSP promotor region. Accordingly, β-Catenin knockdown by siRNAs reduced normal HmTSP expression at the head organizer. In contrast, knockdown of HmTSP expression led to increased numbers of ectopic organizers in Alsterpaullone-treated animals, indicating a negative regulatory function. Our data suggest an unexpected role for HmTSP as a feedback inhibitor of Wnt signaling during Hydra body axis patterning and maintenance.