Mathematical reaction-diffusion models have been suggested to describe formation of animal pigmentation patterns and distribution of epidermal appendages. However, the crucial signals and in vivo mechanisms are still elusive. Here we identify WNT and its inhibitor DKK as primary determinants of murine hair follicle spacing, using a combined experimental and computational modeling approach. Transgenic DKK overexpression reduces overall appendage density. Moderate suppression of endogenous WNT signaling forces follicles to form clusters during an otherwise normal morphogenetic program. These results confirm predictions of a WNT/DKK-specific mathematical model and provide in vivo corroboration of the reaction-diffusion mechanism for epidermal appendage formation.