The winged helix transcription factor Foxl1, expressed in the gut mesenchyme, regulates epithelial cell proliferation and differentiation through the Wnt/beta-catenin pathway. To better understand the role of Foxl1 in epithelial morphogenesis, we examined the tissue structure and positioning of epithelial cells in the small intestine of Foxl1-deficient mice. The small intestine of Foxl1-deficient mice manifested aberrant crypt structure, including widely distributed Paneth cells, which coincided with the ectopic and increased expression of EphB2 and EphB3, which are key regulators of epithelial cell positioning. Furthermore, real-time quantitative PCR indicated that a subset of Wnt family genes was highly expressed in the gut mesenchyme of Foxl1-deficient mice compared with that of wild-type mice. Such an increase in Wnt expression was remarkable in the mesenchyme, where the aberrant Paneth cell positioning was observed by in situ hybridization. Foxl1 plays an important role in the maintenance of crypt architecture and epithelial cell positioning through the mesenchymal-epithelial interaction in the small intestine. This interaction is essential for the normal regulation of the Wnt/beta-catenin pathway and the subsequent EphB/EphrinB expression.