The anterior-posterior axis of the mouse embryo is defined before formation of the primitive streak, and axis specification and subsequent anterior development involves signaling from both embryonic ectoderm and visceral endoderm. Tauhe Wnt signaling pathway is essential for various developmental processes, but a role in anterior-posterior axis formation in the mouse has not been previously established. Beta-catenin is a central player in the Wnt pathway and in cadherin-mediated cell adhesion. We generated beta-catenin-deficient mouse embryos and observed a defect in anterior-posterior axis formation at embryonic day 5.5, as visualized by the absence of Hex and Hesx1 and the mislocation of cerberus-like and Lim1 expression. Subsequently, no mesoderm and head structures are generated. Intercellular adhesion is maintained since plakoglobin substitutes for beta-catenin. Our data demonstrate that beta-catenin function is essential in anterior-posterior axis formation in the mouse, and experiments with chimeric embryos show that this function is required in the embryonic ectoderm.