In mouse embryos, loss of Dickkopf-1 (DKK1) activity is associated with an ectopic activation of WNT signalling responses in the precursors of the craniofacial structures and leads to a complete truncation of the head at early organogenesis. Here, we show that ENU-induced mutations of genes coding for two WNT canonical pathway factors, the co-receptor LRP6 and the transcriptional co-activator β-catenin, also elicit an ectopic signalling response and result in loss of the rostral tissues of the forebrain. Compound mutant embryos harbouring combinations of mutant alleles of Lrp6, Ctnnb1 and Dkk1 recapitulate the partial to complete head truncation phenotype of individual homozygous mutants. The demonstration of a synergistic interaction of Dkk1, Lrp6 and Ctnnb1 provides compelling evidence supporting the concepts that (1) stringent regulation of the level of canonical WNT signalling is necessary for head formation, (2) activity of the canonical pathway is sufficient to account for the phenotypic effects of mutations in three different components of the signal cascade and (3) rostral parts of the brain and the head are differentially more sensitive to canonical WNT signalling and their development is contingent on negative modulation of WNT signalling activity.