Hair shaft differentiation and the induction of hair follicle placodes in the mammalian embryonic surface ectoderm require β-catenin signalling but can activation of this signal alone globally program ectodermal cells to a hair follicle fate? The answer, report Sarah Millar and co-workers on p. 2161, is yes. However, controlled downregulation of β-catenin signalling is needed for the development of a normal fur coat. The researchers found that hair follicle placodes are expanded and induced prematurely in mouse embryos that express a mutant dominant-active form of endogenous epithelial β-catenin. These premature placodes fail to invaginate but precociously express hair shaft keratins. Eventually, the whole epidermis adopts a hair follicle fate and epidermal stratification is disrupted. In addition, the mutant embryonic skin becomes prematurely innervated and pigmented. Thus, the researchers conclude,β-catenin not only promotes hair follicle placode and hair shaft fate,but also activates the signals that attract nerve fibres and melanoblasts into the developing hair follicles and suppresses epidermal differentiation.