We have investigated how Wnt and vitamin D receptor signals regulate epidermal differentiation. Many epidermal genes induced by beta-catenin, including the stem cell marker keratin 15, contain vitamin D response elements (VDREs) and several are induced independently of TCF/Lef. The VDR is required for beta-catenin induced hair follicle formation in adult epidermis, and the vitamin D analog EB1089 synergizes with beta-catenin to stimulate hair differentiation. Human trichofolliculomas (hair follicle tumours) are characterized by high nuclear beta-catenin and VDR, whereas infiltrative basal cell carcinomas (BCCs) have high beta-catenin and low VDR levels. In mice, EB1089 prevents beta-catenin induced trichofolliculomas, while in the absence of VDR beta-catenin induces tumours resembling BCCs. We conclude that VDR is a TCF/Lef-independent transcriptional effector of the Wnt pathway and that vitamin D analogues have therapeutic potential in tumors with inappropriate activation of Wnt signalling.