beta -Catenin is an essential molecule in Wnt/wingless signaling, which con
trols decisive steps in embryogenesis. To study the role of beta -catenin i
n skin development, we introduced a conditional mutation of the gene in the
epidermis and hair follicles using Cre/loxP technology. When beta -catenin
is mutated during embryogenesis, formation of placodes that generate hair
follicles is blocked. We show that beta -catenin is required genetically do
wnstream of tabby/downless and upstream of bmp and shh in placode formation
. If beta -catenin is deleted after hair follicles have formed, hair is com
pletely lost after the first hair cycle. Further analysis demonstrates that
beta -catenin is essential for fate decisions of skin stem cells: in the a
bsence of beta -catenin, stem cells rail to differentiate into follicular k
eratinocytes, but instead adopt an epidermal fate.