Fibroproliferative processes are a group of disorders in which there is excessive proliferation of spindle (mesenchymal fibroblast-like) cells. They range from hypertrophic scars to neoplasms such as aggressive fibromatosis. Cells from these disorders share cytologic similarity with fibroblasts present during the proliferative phase of wound healing, suggesting that they represent a prolonged wounding response. A critical role for beta-catenin in mesenchymal cells in fibroproliferative processes is suggested by its high rate of somatic mutation in aggressive fibromatosis. Using a Tcf-reporter mouse we found that beta-catenin protein level and Tcf-transcriptional activity are elevated in fibroblasts during the proliferative phase of healing. We generated a transgenic mouse in which stabilized beta-catenin is expressed in mesenchymal cells under control of a tetracycline-regulated promoter. Fibroblasts from the transgenic mice exhibited increased proliferation, motility, and invasiveness when expressing stabilized beta-catenin and induced tumors after induction of the transgene when grafted into nude mice. Mice developed aggressive fibromatoses and hyperplastic gastrointestinal polyps after 3 months of transgene induction and healed with hyperplastic cutaneous wounds compared with control mice, which demonstrates an important function for beta-catenin in mesenchymal cells and shows a central role for beta-catenin in wound healing and fibroproliferative disorders.