Activation of β-catenin, the principal mediator of canonical Wnt signaling, is a common pathologic finding in a wide variety of chronic kidney diseases (CKD). While β-catenin is induced predominantly in renal tubular epithelium in CKD, surprisingly, depletion of tubular β-catenin had little effect on the severity of renal fibrosis. Interestingly, less apoptosis was detected in interstitial fibroblasts in knockout mice, which was accompanied by a decreased expression of Bax and Fas ligand (FasL). Tubule-specific knockout of β-catenin diminished renal induction of matrix metalloproteinase (MMP-7), which induced FasL expression in interstitial fibroblasts and potentiated fibroblast apoptosis in vitro. These results demonstrate that loss of tubular β-catenin resulted in enhanced interstitial fibroblast survival due to decreased MMP-7 expression. Our studies uncover a novel role of the tubular β-catenin/MMP-7 axis in controlling the fate of interstitial fibroblasts via epithelial-mesenchymal communication.