Sertoli and germ cell interactions are essential for spermatogenesis and, thus, male fertility. Sertoli cells provide a specialized microenvironment for spermatogonial stem cells to divide, allowing both self-renewal and spermatogenesis. In the present study, we used mice with a conditional activated allele of the beta-catenin gene (Ctnnb1^tm1Mmt/+) in Sertoli cells expressing Cre recombinase driven by the anti-Müllerian hormone (AMH; also known as Müllerian-inhibiting substance) type II receptor promoter (Amhr2^{tm3(cre)Bhr/+}) to show that constitutively activated beta-catenin leads to their continuous proliferation and compromised differentiation. Compared to controls, Sertoli cells in mature mutant mice continue to express high levels of both AMH and glial cell-derived neurotrophic factor (GDNF), which normally are expressed only in immature Sertoli cells. We also show evidence that LiCl treatment, which activates endogenous nuclear beta-catenin activity, regulates both AMH and GDNF expression at the transcriptional level. The epididymides were devoid of sperm in the Amhr2^{tm3(cre)Bhr/+};Ctnnb1^tm1Mmt/+ mice at all ages examined. We show that the mutant mice are infertile because of defective differentiation of germ cells and increased apoptosis, both of which are characteristic of GDNF overexpression in Sertoli cells. Constitutive activation of beta-catenin in Amhr2-null mice showed the same histology, suggesting that the phenotype was the result of persistent overexpression of GDNF. These results show that dysregulated wingless-related MMTV integration site/beta-catenin signaling in Sertoli cells inhibits their postnatal differentiation, resulting in increased germ cell apoptosis and infertility.