Beta-catenin is a critical regulator of cell behavior during embryogenesis and neoplastic processes. It also plays a crucial role in repair by modulating dermal fibroblast activity during the proliferative phase of cutaneous wound healing. We hypothesize that growth factors liberated during the initial phase of wound healing convey signals to induce activation of beta-catenin-mediated TCF-dependent signaling during the proliferative phase. Dermal fibroblasts were isolated and cultured from mice containing a beta-galactosidase reporter responsive to beta-catenin-TCF transactivation (TCF-beta-gal). Cells were stimulated with growth factors present at the initial phase of wound healing. EGF and TGF-beta1 significantly increased beta-catenin protein levels and transcriptional activity, whereas beta-catenin mRNA expression was unaffected. This increase was attributed to inactivation of GSK-3beta, a kinase important for beta-catenin destabilization. Subcutaneous injection of EGF or TGF-beta1 before wounding of TCF-beta-gal mice resulted in larger scars and fibroblasts within these wounds that strongly stained for beta-galactosidase, indicating significant beta-catenin transcriptional activity in vivo. Thus, beta-catenin-mediated signaling is activated downstream of growth factors released during the initial phase of wound repair, and may act during the proliferative phase of wound healing to integrate signals from initial phase factors into the expression of genes important during the later, remodeling phase.