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Fungiform taste papillae form a regular array on the dorsal tongue. Taste buds arise from papilla epithelium and, unusually for epithelial derivatives, synapse with neurons, release neurotransmitters and generate receptor and action potentials. Despite the importance of taste as one of our five senses, genetic analyses of taste papilla and bud development are lacking. We demonstrate that Wnt-beta-catenin signaling is activated in developing fungiform placodes and taste bud cells. A dominant stabilizing mutation of epithelial beta-catenin causes massive overproduction of enlarged fungiform papillae and taste buds. Likewise, genetic deletion of epithelial beta-catenin or inhibition of Wnt-beta-catenin signaling by ectopic dickkopf1 (Dkk1) blocks initiation of fungiform papilla morphogenesis. Ectopic papillae are innervated in the stabilizing beta-catenin mutant, whereas ectopic Dkk1 causes absence of lingual epithelial innervation. Thus, Wnt-beta-catenin signaling is critical for fungiform papilla and taste bud development. Altered regulation of this pathway may underlie evolutionary changes in taste papilla patterning.