The Wnt/beta-catenin signaling pathway controls cell fate and neoplastic transformation. Expression of an endogenous stabilized beta-catenin (DeltaE3 beta-catenin) in mammary epithelium leads to the transdifferentiation into epidermis- and pilar-like structures. Signaling molecules in the canonical Wnt pathway upstream from beta-catenin induce glandular tumors but it is not clear whether they also cause squamous transdifferentiation. To address this question we have now investigated mammary epithelium from transgenic mice that express activating molecules of the Wnt pathway: Wnt10b, Int2/Fgf3, CK2alpha, DeltaE3 beta-catenin, Cyclin D1, and dominant negative (dn) GSK3beta. Cytokeratin 5 (CK5), which is expressed in both mammary myoepithelium and epidermis, and the epidermis-specific CK1 and CK6 were used as differentiation markers. Extensive squamous metaplasias and widespread expression of CK1 and CK6 were observed in DeltaE3 beta-catenin transgenic mammary tissue. Wnt10b and Int2 transgenes also induced squamous metaplasias, but expression of CK1 and CK6 was sporadic. While CK5 expression in Wnt10b transgenic tissue was still confined to the lining cell layer, its expression in Int2 transgenic tissue was completely disorganized. In contrast, cytokeratin expression in CK2alpha, dnGSK3beta and Cyclin D1 transgenic mammary tissues was similar to that in DeltaE3 beta-catenin tissue. In support of transdifferentiation, expression of hard keratins specific for hair and nails was observed in pilar tumors. These results demonstrate that the activation of Wnt signaling components in mammary epithelium induces not only glandular tumors but also squamous differentiation, possibly by activating LEF-1, which is expressed in normal mammary epithelium.