AbstractBackground: Intercellular communication between epithelial and mesenchymal cells is central to mammalian craniofacial development. β‐catenin is the gateway of canonical Wnt signaling, one of the major evolutionarily conserved cell–cell communication pathways in metazoa. In this study, we report an unexpected stage‐ and tissue‐specific function of β‐catenin during mammalian jaw development. Results: Using a unique mouse genetic tool, we have discovered that epithelial β‐catenin is essential for lower jaw formation, while attenuation of β‐catenin is required for proper upper jaw development. Changes in β‐catenin in vivo alter major epithelial Fgf8, Bmp4, Shh, and Edn1 signals, resulting in partial transcriptional reprogramming of the neural crest‐derived mesenchyme, the primary source of jawbones. Conclusions: The Wnt/β‐catenin signal coordinates expression of multiple epithelial signals and has stage‐specific asymmetric functions during mammalian upper and lower jaw development. In addition, these findings suggest that evolutionary changes of the canonical Wnt/β‐catenin signaling pathway may lead to innovation of jaws. Developmental Dynamics 241:663–674, 2012. © 2012 Wiley Periodicals, Inc.