The epithelial layers of the ciliary body (CB) and iris are non-neural structures that differentiate from the anterior region of the eyecup, the ciliary margin (CM). We show here that activation of the canonical Wnt signaling pathway is sufficient and necessary for the normal development of anterior eye structures. Pharmacological activation of beta-catenin signaling with lithium (Li(+)) treatment in retinal explants in vitro induced the ectopic expression of the CM markers Otx1 and Msx1. Cre-mediated stabilization of beta-catenin expression in the peripheral retina in vivo induced a cell autonomous upregulation of CM markers at the expense of neural retina (NR) markers and inhibited neurogenesis. Consistent with a cell autonomous conversion to peripheral eye fates, the proliferation index in the region of the retina that expressed stabilized beta-catenin was identical to the wild-type CM and there was an expansion of CB-like structures at later stages. Conversely, Cre-mediated inactivation of beta-catenin reduced CM marker expression as well as the size of the CM and CB/iris. Aberrant CB development in both mouse models was also associated with a reduction in the number of retinal stem cells in vitro. In summary, activation of canonical Wnt signaling is sufficient to promote the development of peripheral eyecup fates at the expense of the NR and is also required for the normal development of anterior eyecup structures.