Many components of the Wnt/β-catenin signaling pathway are expressed during mouse pre-implantation embryo development, suggesting that this pathway may control cell proliferation and differentiation at this time. We find no evidence for a functional activity of this pathway in cleavage-stage embryos using the Wnt-reporter line, BAT-gal. To further probe the activity of this pathway, we activated β-catenin signaling by mating a zona pellucida3-cre(Zp3-cre) transgenic mouse line with a mouse line containing an exon3-floxedβ-catenin allele. The result is expression of a stabilized form ofβ-catenin, resistant to degradation by the GSK3β-mediated proteasome pathway, expressed in the developing oocyte and in each cell of the resulting embryos. Nuclear localization and signaling function of β-catenin were not observed in cleavage-stage embryos derived from these oocytes. These results indicate that in pre-implantation embryos, molecular mechanisms independent of the GSK3β-mediated ubiquitination and proteasome degradation pathway inhibit the nuclear function of β-catenin. Although the mutant blastocysts initially developed normally, they then exhibited a specific phenotype in the embryonic ectoderm layer of early post-implantation embryos. We show a nuclear function of β-catenin in the mutant epiblast that leads to activation of Wnt/β-catenin target genes. As a consequence,cells of the embryonic ectoderm change their fate, resulting in a premature epithelial-mesenchymal transition.