Mice that lack the epidermal growth factor receptor (EGFR) fail to develop a hair coat, but the mechanism responsible for this deficit is not completely understood. Here, we show that EGFR plays a critical role to attenuate wingless-type MMTV integration site family member (Wnt)/β-catenin signaling during postnatal hair follicle development. Genetic ablation of EGFR in mice resulted in increased mitotic activity in matrix cells, apoptosis in hair follicles, and impaired differentiation of epithelial lineages that form hair. EGFR is activated in wild-type hair follicle stem cells marked with SOX9 or NFATc1 and is essential to restrain proliferation and support stem cell numbers and their quiescence. We observed elevated levels of Wnt4, 6, 7b, 10a, 10b, and 16 transcripts and hyperactivation of the β-catenin pathway in EGFR knockout follicles. Using primary keratinocytes, we linked ligand-induced EGFR activation to suppression of nascent mRNA synthesis of Wnt genes. Overexpression of the Wnt antagonist sFRP1 in mice lacking EGFR demonstrated that elevated Wnts are a major cause for the hair follicle defects. Colocalization of transforming growth factor α and Wnts regulated by EGFR in stem cells and progeny indicates that EGFR autocrine loops control Wnts. Our findings define a novel mechanism that integrates EGFR and Wnt/β-catenin pathways to coordinate the delicate balance between proliferation and differentiation during development.