The purpose of this study was to determine whether β-catenin regulates basal cell fate determination in the mouse trachea. Analysis of TOPGal transgene reporter activity and Wnt/β-catenin pathway gene expression suggested a role for β-catenin in basal cell proliferation and differentiation after naphthalene-mediated Clara-like and ciliated cell depletion. However, these basal cell activities occurred simultaneously, limiting precise determination of the role(s) played by β-catenin. This issue was overcome by analysis of β-catenin signaling in tracheal air-liquid interface cultures. The cultures could be divided into two phases: basal cell proliferation and basal cell differentiation. A role for β-catenin in basal cell proliferation was indicated by activation of the TOPGal transgene on proliferation days 3 to 5 and by transient expression of Myc (alias c-myc). Another peak of TOPGal transgene activity was detected on differentiation days 2 to 10 and was associated with the expression of Axin 2. These results suggest a role for β-catenin in basal to ciliated and basal to Clara-like cell differentiation. Genetic stabilization of β-catenin in basal cells shortened the period of basal cell proliferation but had a minor effect on this process. Persistent β-catenin signaling regulated basal cell fate by driving the generation of ciliated cells and preventing the production of Clara-like cells.