The bones of the mammalian skull vault form through intramembranous ossification. Skull bones ossify directly, in a process regulated by β-catenin, instead of passing through a cartilage intermediate. We tested whether β-catenin is necessary for fate selection of intramembranous bone progenitors in the skull. Here, we show in mice that removal of β-catenin from skull bone progenitors results in the near complete transformation of the skull bones to cartilage, whereas constitutive β-catenin activation inhibits skull bone fate selection. β-catenin directly activated Twist1 expression in skull progenitors, conditional Twist1 deletion partially phenocopied the absence of β-catenin, and Twist1 deletion partially restored bone formation in the presence of constitutive β-catenin activation. Finally, Twist1 bound robustly to the 3′UTR of Sox9, the central initiator of chondrogenesis, suggesting that Twist1 might directly repress cartilage formation through Sox9. These findings provide insight into how β-catenin signaling via Twist1 actively suppresses the formation of cartilage and promotes intramembranous ossification in the skull.