During hepatogenesis, after the liver has budded out of the endoderm, the hepatoblasts quickly expand and differentiate into either hepatocytes or biliary cells, the latter of which arise only within the ductal plate surrounding the portal vein. Because the Wnt/β‐catenin pathway is involved in liver homeostasis and regeneration and in liver carcinogenesis, we investigated here a role for Wnt/β‐catenin signaling in the embryonic liver. A cyclization recombination (Cre)/locus of X‐over P1 (loxP) strategy was chosen to perform adenomatous polyposis coli (Apc) invalidation in order to activate ectopic β‐catenin signaling in hepatoblasts; an appropriate transgenic model expressing the Cre recombinase was used. Phenotypic and immunolocalization studies, together with messenger RNA analyses, by microarray and real‐time quantitative polymerase chain reaction approaches were performed on this model during normal hepatogenesis. The loss of Apc allowed β‐catenin activation in the hepatoblasts after the formation of the liver bud and led to embryonic lethality. In this model, the liver became hypoplastic, and hepatocyte differentiation failed, whereas β‐catenin–activated ducts developed and gave rise to fully differentiated bile ducts when transplanted into adult recipient livers. Microarray analyses suggested that β‐catenin plays a role in repressing the hepatocyte genetic program and remodeling the ductal plate. According to these data, in normal embryonic livers, β‐catenin was transiently activated in the nascent bile ducts. Conclusion: We demonstrated a key role for the Wnt/β‐catenin pathway in liver embryonic growth and in controlling the fate of hepatoblasts, preventing them from differentiating toward the hepatocyte lineage, and guiding them to biliary ductal morphogenesis. (HEPATOLOGY 2007.)