In the current analysis, we have investigated both the cytoskeletal and signaling roles of beta-catenin during the early phases of lens development using conditional loss- and gain-of-function strategies. Conditional loss of beta-catenin in the presumptive lens does not perturb the normal sequential appearance of lens fate markers but results in a dramatic failure of the coordinated epithelial cell behavior that constitutes lens morphogenesis. Similarly, loss-of-function for Lrp6, the Wnt pathway coreceptor expressed in the eye primordium, does not prevent expression of lens induction markers. Surprisingly, conditional deletion of beta-catenin in periocular ectoderm results in the formation of Prox-1 and beta-crystallin-positive ectopic lentoid bodies. Combined with the observation that the Wnt pathway reporter TOPGAL is expressed in nasal periocular ectoderm, these data suggest that, in this location, the canonical Wnt signaling pathway normally suppresses lens fate in favor of other structures. Consistent with this proposal, a dominant-active form of beta-catenin causes a loss of lens fate and a complete absence of lens development when expressed in the presumptive lens ectoderm.