Maintenance of classic stem cell hierarchies is dependent upon stem cell self-renewal mediated in part by Wnt/beta-catenin regulation of the cell cycle. This function is critical in rapidly renewing tissues due to the obligate role played by the tissue stem cell. However, the stem cell hierarchy responsible for maintenance of the conducting airway epithelium is distinct from classic stem cell hierarchies. The epithelium of conducting airways is maintained by transit-amplifying cells in the steady state; rare bronchiolar stem cells are activated to participate in epithelial repair only following depletion of transit-amplifying cells. Here, we investigate how signaling through beta-catenin affects establishment and maintenance of the stem cell hierarchy within the slowly renewing epithelium of the lung. Conditional potentiation of beta-catenin signaling in the embryonic lung results in amplification of airway stem cells through attenuated differentiation rather than augmented proliferation. Our data demonstrate that the differentiation-modulating activities of stabilized beta-catenin account for expansion of tissue stem cells.