Lymphoid Enhancer Factor 1 (Lef-1) is an important developmental transcription factor required for the inductive formation of several epithelial-derived organs including hair follicles. Inductive expression of Lef-1 mRNA is tightly regulated during embryo development, suggesting the involvement of a highly regulated promoter. In vitro analysis of the Lef-1 gene has demonstrated the existence of at least two spatially distinct promoters with multiple transcriptional start sites that are responsive to the canonical Wnt/beta-catenin pathway. Regions of the Lef-1 promoter required for inductive regulation in vivo, however, have yet to be determined. To this end, we utilized LacZ-reporter transgenic mice to define segments of the human Lef-1 promoter capable of reproducing mesenchymal- or epithelial-restricted transcriptional patterns of Lef-1 expression during hair and vibrissa follicle development. These studies have revealed that a 110 bp Wnt/beta-catenin-responsive element, contained within a minimal 2.5 kb Lef-1 promoter, plays an important role in regulating mesenchymal, and potentially epithelial, expression during follicle development in mouse embryos. This 2.5 kb Lef-1 promoter also demonstrated inductive mesenchymal expression during postnatal anagen stage hair-follicle cycling. Additionally, analysis of Lef-1 promoter expression revealed previously uncharacterized regions of endogenous Lef-1 expression seen in the sebaceous glands of vibrissa and hair follicles in transgenic lines harboring the minimal Lef-1 promoter and additional intronic sequences. In summary, these studies have begun to dissect the transcriptional diversity of the human Lef-1 promoter during the hair/vibrissa follicle and sebaceous gland formation.