After cutaneous injury, a variety of cell types are activated to reconstitute the epithelial and dermal components of the skin. β‐Catenin plays disparate roles in keratinocytes and fibroblasts, inhibiting keratinocyte migration and activating fibroblast proliferation, suggesting that β‐catenin could either inhibit or enhance the healing process. How β‐catenin functions in concert with other signaling pathways important in the healing process is unknown. Wound size was examined in mice expressing conditional null or conditional stabilized alleles of β‐catenin, regulated by an adenovirus expressing cre‐recombinase. The size of the wounds in the mice correlated with the protein level of β‐catenin. Using mice expressing these conditional alleles, we found that the wound phenotype imparted by Smad3 deficiency and by the injection of TGF+ before wounding is mediated in part by β‐catenin. TGF+ was not able to regulate proliferation in β‐catenin null fibroblasts, whereas keratinocyte proliferation rate was independent of β‐catenin. When mice are treated with lithium, β‐catenin‐mediated signaling was activated in cutaneous wounds, which healed with a larger size. These results demonstrate a crucial role for β‐catenin in regulating cutaneous wound size. Furthermore, these data implicate mesenchymal cells as playing a critical role regulating wound size.‐Cheon, S. S., Wei, Q., Gurung, A., Youn, A., Bright, T., Poon, R., Whetstone, H., Guha, A., Alman, B. A. Beta‐catenin regulates wound size and mediates the effect of TGF‐beta in cutaneous healing. FASEB J. 20, 692–701 (2006)