Wnt/beta-catenin signalling plays a key role in the homeostasis of the intestinal epithelium. Whereas its role in the maintenance of the stem cell compartment has been clearly demonstrated, its role in the Paneth cell fate remains unclear. We performed genetic studies to elucidate the functions of the Wnt/beta-catenin pathway in Paneth cell differentiation. We analysed mice with inducible gain-of-function mutations in the Wnt/beta-catenin pathway and mice with a hypomorphic beta-catenin allele that have not been previously described. We demonstrated that acute activation of Wnt/beta-catenin signalling induces de novo specification of Paneth cells in both the small intestine and colon and that colon cancers resulting from Apc mutations expressed many genes involved in Paneth cell differentiation. This suggests a key role for the Wnt/beta-catenin pathway in Paneth cell differentiation. We also showed that a slight decrease in beta-catenin gene dosage induced a major defect in Paneth cell differentiation, but only a modest effect on crypt morphogenesis. Overall, our findings show that a high level of beta-catenin activation is required to determine Paneth cell fate and that fine tuning of beta-catenin signalling is critical for correct Paneth cell lineage.