Wnts have key roles in many developmental processes, including hair follicle growth and differentiation. Stabilization of beta-catenin is essential in the canonical Wnt signaling pathway. We developed transgenic mice expressing a regulated form of beta-catenin in the skin. Chronic activation of beta-catenin in resting (telogen) hair follicles resulted in changes consistent with induction of an exaggerated, aberrant growth phase (anagen). Transient activation of beta-catenin produced a normal anagen. Our data lend strong support to the notion that a Wnt/beta-catenin signal operating on hair follicle precursor cells serves as a crucial proximal signal for the telogen-anagen transition.