Activation of Wnt/Beta-catenin signalling in adult mouse epidermis leads to expansion of the stem cell compartment and redirects keratinocytes in the interfollicular epidermis and sebaceous glands (SGs) to differentiate along the hair follicle (HF) lineages. Here we demonstrate that during epidermal development and homeostasis there is reciprocal activation of the androgen receptor (AR) and Beta-catenin in cells of the HF bulb. AR activation reduced Beta-catenin-dependent transcription, blocked Beta-catenin induced induction of HF growth and prevented Beta-catenin-mediated conversion of SGs into HFs. Conversely, AR inhibition enhanced the effects of Beta-catenin activation, promoting HF proliferation and differentiation, culminating in the formation of benign HF tumours and complete loss of SG identity. We conclude that AR signalling plays a key role in epidermal stem cell fate selection by modulating responses to Beta-catenin in adult mouse skin.