The switch between black and yellow pigment is mediated by the interaction between Melanocortin receptor 1 (Mc1r) and its antagonist Agouti, but the genetic and developmental mechanisms that modify this interaction to obtain different coat color in distinct environments are poorly understood. Here, the role of Wnt/β-catenin signaling in the regulation of pigment-type switching was studied. Loss and gain of function of β-catenin in the dermal papilla (DP) of the hair follicle results in yellow and black animals, respectively. β-Catenin activity in the DP suppresses Agouti expression and activates Corin, a negative regulator of Agouti activity. In addition, β-catenin activity in the DP regulates melanocyte activity by a mechanism that is independent of both Agouti and Corin. The coordinate and inverse regulation of Agouti and Corin renders pelage pigmentation sensitive to changes in β-catenin activity in the DP that do not alter pelage structure. As a result, the signals that specify two biologically distinct quantitative traits are partially uncoupled despite their common regulation by the β-catenin pathway in the same cells.