Adult hepatic stem cells or oval cells are facultative stem cells in the liver that are activated during regeneration only during inhibition of innate hepatocyte proliferation. On the basis of its involvement in liver cancer, regeneration, and development, we investigated the role of the Wnt/β‐catenin pathway in oval cell response, which was initiated in male Fisher rats with 2‐acetylaminofluorine and two‐third partial hepatectomy (PHX). Extensive oval cell activation and proliferation were observed at 5 and 10 days post‐PHX, as indicated by hematoxylin‐eosin and proliferating cell nuclear antigen analysis. A noteworthy increase in total and active β‐catenin was observed at this time, which was localized to the oval cell cytoplasm and nuclei by immunohistochemistry and confirmed by double immunofluorescence. A concomitant increase in Wnt‐1 in hepatocytes along with increased expression of Frizzled‐2 in oval cells was observed. This paracrine mechanism coincided with a decrease in Wnt inhibitory factor‐1 and glycogen synthase kinase‐3β down‐regulation leading to β‐catenin stabilization. To strengthen its role, β‐catenin conditional knockout mice were treated with 3,5‐diethoxycarbonyl‐1,4‐dihydrocollidine to induce oval cell activation. A dramatic decrease in the A6‐positive oval cell numbers in the absence of β‐catenin demonstrated a critical role of β‐catenin in oval cell biology. Conclusion: The Wnt/β‐catenin pathway plays a key role in the normal activation and proliferation of adult hepatic stem cells. (HEPATOLOGY 2007.)