Transgenic mice expressing stabilized beta-catenin in neural progenitors develop enlarged brains resulting from increased progenitor expansion. To more precisely define beta-catenin regulation of progenitor fate, we employed a conditional transgenic approach to delete the beta-catenin regulatory domain from neural progenitors, resulting in expression of stabilized protein from its endogenous promoter in these cells and their progeny. An increased fraction of transgenic cortical cells express the progenitor markers Nestin and LewisX, confirming a relative expansion of this population. Sustained beta-catenin activity expands RC2 and Pax6 expression in the developing cortex while postponing the onset of Tbr2 expression, suggesting a delay in maturation of radial glia into intermediate progenitors. Furthermore, transgenic cortical cells fail to either upregulate ErbB4 or develop a mitogenic response to epidermal growth factor, changes that normally accompany the acquisition of an intermediate fate. Likewise, transgenic brains do not develop a distinct subventricular zone or superficial cortical layers, and overexpression of stabilized beta-catenin by in utero electroporation caused a relative reduction of upper layer vs. lower layer cortical neurons, indicating that persistent beta-catenin activity interferes with the generation of progenitors responsible for the production of upper layer cortical neurons. Collectively, these findings demonstrate that beta-catenin functions to maintain the radial glial population, and suggest that downregulation of beta-catenin signaling may be critical to facilitate the transition to an intermediate progenitor phenotype.