The tumor suppressor gene Apc (adenomatous polyposis coli) is a member of the Wnt signaling pathway that is involved in development and tumorigenesis. Heterozygous knockout mice for Apc have a tumor predisposition phenotype and homozygosity leads to embryonic lethality. To understand the role of Apc in development we generated a floxed allele. These mice were mated with a strain carrying Cre recombinase under the control of the human Keratin 14 (K14) promoter, which is active in basal cells of epidermis and other stratified epithelia. Mice homozygous for the floxed allele that also carry the K14-cre transgene were viable but had stunted growth and died before weaning. Histological and immunochemical examinations revealed that K14-cre-mediated Apc loss resulted in aberrant growth in many ectodermally derived squamous epithelia, including hair follicles, teeth, and oral and corneal epithelia. In addition, squamous metaplasia was observed in various epithelial-derived tissues, including the thymus. The aberrant growth of hair follicles and other appendages as well as the thymic abnormalities in K14-cre; Apc(CKO/CKO) mice suggest the Apc gene is crucial in embryonic cells to specify epithelial cell fates in organs that require epithelial-mesenchymal interactions for their development.