Wnts have key roles in many developmental processes, including hair follicle growth and differentiation. Stabilization of -catenin is essential in the canonical Wnt signaling pathway. We developed transgenic mice expressing a regulated form of -catenin in the skin. Chronic activation of -catenin in resting (telogen) hair follicles resulted in changes consistent with induction of an exaggerated, aberrant growth phase (anagen). Transient activation of -catenin produced a normal anagen. Our data lend strong support to the notion that a Wnt/ -catenin signal operating on hair follicle precursor cells serves as a crucial proximal signal for the telogen-anagen transition. Wnt family proteins function in short-range signaling. They regulate cell fate, adhesion, differentiation, proliferation, and motility, and many studies have demonstrated their critical roles in development (for review, see Peifer and Polakis 2000). Mutational defects in Wnt signaling have a major contributing role in a broad spectrum of cancers (Polakis 2000). At present, it appears many Wnts exert their effects, at least in part, through a "canonical" signaling pathway in which stabilization of the -catenin protein is essential. Much of the -catenin protein in the cell is associated with the cell membrane, where -catenin binds to and links E-cadherin to the cytoskeleton through -catenin's binding to ␣-catenin. A fraction of the -catenin is free in the cytoplasm and/or nucleus. Normally, in the absence of Wnt signals, -catenin is bound and negatively regulated by a protein complex that includes the adenomatous polyposis coli (APC) and axin tumor suppressor proteins as well as glycogen synthase kinase-3 (GSK-3; for review, see Peifer and Polakis 2000). This complex promotes phosphorylation of -catenin at a number of N-terminal serine and threonine residues, and the phosphorylated -catenin is ubiquitinated and subsequently degraded by the proteasome.Binding of Wnts to their cognate frizzled and low-density lipoprotein receptor-related protein receptor complexes on the cell surface leads to inhibition of GSK-3 activity and increased levels of free -catenin in the cell (Peifer and Polakis 2000). In cancers, inactivating mutations in the APC or axin proteins or activating mutations affecting N-terminal phosphorylation sites in -catenin lead to stabilization of -catenin (Polakis 2000). Regardless of whether Wnt signals or mutational defects stabilize -catenin, following its accumulation in the cell, -catenin can complex in the nucleus with T cell factor/ lymphoid enhancer factor (TCF/LEF) transcription regulators, leading to activation of TCF-regulated genes (a list of candidate TCF target genes is provided at: http:// www.stanford.edu/∼rnusse/wntwindow.html).Wnt/-catenin signaling has been proposed to function in hair follicle morphogenesis and differentiation (Kishimoto et al. 2000;Fuchs et al. 2001;Millar 2002). Hair follicle morphogenesis is characterized by the downward growth of epithelial hair follicle precursor cells into the ...