Introduction Adenomatous polyposis coli (APC) is a member of the Wnt signaling pathway and one of its known functions is to regulate the levels of β-catenin. Alterations in β-catenin regulation are very common in human tumors [1]. Loss of APC is associated with stabilization of the cytosolic β-catenin that ultimately results in its migration to the nucleus and activating a cascade of events leading to tumorigenesis. APC also interacts with a multitude of other cellular proteins, including axin-2 (AXIN2), plakoglobin (JUP), Asef (ARHGEF4), kinesin superfamily–associated protein 3 (KIFAP3), EB1 (MAPRE1), microtubules, and the human homolog of Drosophila discs large (DLG1). These interactions suggest that APC can potentially regulate many cellular functions, including intercellular adhesion, cytoskeletal organization, regulation of plakoglobin levels, regulation of the cell cycle and apoptosis, orientation of asymmetric stem cell division, and control of cell polarization [2,3]. APC is a tumor suppressor gene. Somatic mutations in APC are frequently found in many sporadic tumors of the colon and rectum. Autosomal dominant germline mutations in APC cause familial adenomatous polypois (FAP) and its variant, Gardner syndrome. FAP patients are characterized by hundreds of adenomatous colorectal polyps, with an almost inevitable progression to colorectal cancer in the third and fourth decades of life [4,5]. In addition to colorectal neoplams, these individuals can develop extracolonic symptoms, among which are upper gastrointestinal tract polyps, congenital hypertrophy of the retinal pigment epithelium, desmoid tumors, disorders of the maxillary and skeletal bones, and dental abnormalities [6], suggesting the importance of APC gene functions in these organ systems. Although the role of APC in the initiation of human colorectal cancer is well established, its role in other tissue and developmental processes are not well understood. Given the importance of regulation of Wnt signaling in embryonic pattern formation and morphogenesis of many organs, mechanistic understanding of APC in development and in extracolonic tissues becomes critical to better assess potential adverse events in humans. One approach to understand the role of Apc in development is to develop mice with an inactivating Apc mutation. Several genetically modified mouse strains for Apc have been described [7–10]. Most of these models, in the heterozygous state, show a gastrointestinal and other tumor predisposition phenotype [7–10]. Mouse embryos that are homozygous for the genetic modification die during embryogenesis, and some of the models do not survive beyond gastrulation [8,11]. An alternate approach to understand the role of Apc in development and/or in specific tissues is to generate a mouse strain that carries a conditionally modified allele and mate it with a mouse strain that facilitates the modification of the conditional allele in specific cell lineages. To assess the role of Apc in different stages of life systematically, we generated mice containing a conditional knockout (CKO) mutant allele of Apc (ApcCKO). 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. We report here that K14 promoter-driven loss of Apc resulted in aberrant development of several organs that require inductive epithelial–mesenchymal interactions, including hair follicle, teeth, and thymus, and resulted in neonatal death in mice. We found that Apc plays a crucial role in determinations of cell fates during the embryonic development, possibly via temporal and tissue-specific regulation of β-catenin levels in the skin, its appendages, and in the thymus.