E3 ubiquitin-protein ligase that acts as a negative regulator of the Wnt signaling pathway by mediating the ubiquitination and subsequent degradation of Wnt receptor complex components Frizzled and LRP6. Acts on both canonical and non-canonical Wnt signaling pathway. Acts as a tumor suppressor in the intestinal stem cell zone by inhibiting the Wnt signaling pathway, thereby resticting the size of the intestinal stem cell zone (PubMed:22575959). Along with RSPO2 and RNF43, constitutes a master switch that governs limb specification (By similarity). S-ubiquitinyl-[E2 ubiquitin-conjugating enzyme]-L-cysteine + [acceptor protein]-L-lysine = [E2 ubiquitin-conjugating enzyme]-L-cysteine + N(6)-ubiquitinyl-[acceptor protein]-L-lysine. Negatively regulated by R-spondin proteins such as RSPO1: interaction with RSPO1 induces the indirect association between ZNRF3 and LGR4, promoting membrane clearance of ZNRF3. Protein modification; protein ubiquitination. Interacts with LRP6, FZD4, FZD5, FZD6 and FZD8 (PubMed:22575959). Interacts with RSPO1; interaction promotes indirect interaction with LGR4 and membrane clearance of ZNRF3 (PubMed:22575959). Also interacts with RSPO2 (PubMed:29769720). Interacts with LMBR1L (PubMed:31073040). Belongs to the ZNRF3 family. Truncated N-terminus.