Background: The matrix and associated mesenchyme of the extrahepatic bile ducts are distinct, which could drive diseases with a predilection for these ducts, such as primary sclerosing cholangitis. We aimed to understand the molecular drivers of peribiliary mesenchymal cell (PMC) identity in the extrahepatic bile ducts and dissect how this changed in the context of injury using an entirely in vivo approach with transcriptomic analysis. Methods and Results: Single-cell sequencing with a receptor-ligand analysis showed that PMCs had the most interactions with surrounding cells. Wnt4, Wnt5a, and Wnt7b were identified as the major ligands secreted from PMCs and cholangiocytes that interacted in both paracrine and autocrine fashion. Bile duct ligation caused an increase in all 3 Wingless/Integrated ligands and Axin2 with an associated increase in the transcription factors T-box transcription factor (Tbx)2 and Tbx3. Conversely, Indian hedgehog secretion decreased without an associated decrease in hedgehog signaling effectors. Loss of smoothened within PMCs did not impact hedgehog signaling effectors or cellular identity, whereas smoothened gain of function led to myofibroblast transdifferentiation with upregulation of Tbx2 and Tbx3 without injury. Loss of β-catenin caused a decrease in expression of all 3 Gli transcription factors and associated mesenchymal gene expression, which was phenocopied with compound Gli2 and Gli3 loss in uninjured PMCs. With injury, loss of β-catenin resulted in decreased myofibroblast transdifferentiation with reduced Tbx2 and Tbx3 expression. Conclusions: Our results show how modulation of canonical Wingless/Integrated signaling in PMCs is important for regulating basal mesenchymal gene expression and initiating a myogenic gene transcriptional program during injury. They also highlight reciprocating interactions between the hedgehog and Wingless/Integrated signaling pathways within PMCs.