Wnt/β-catenin signaling is critical for tissue regeneration. However, it is unclear how β-catenin controls stem cell behaviors to coordinate organized growth. Using live imaging, we show that activation of β-catenin specifically within mouse hair follicle stem cells generates new hair growth through oriented cell divisions and cellular displacement. β-Catenin activation is sufficient to induce hair growth independently of mesenchymal dermal papilla niche signals normally required for hair regeneration. Wild-type cells are co-opted into new hair growths by β-catenin mutant cells, which non–cell autonomously activate Wnt signaling within the neighboring wild-type cells via Wnt ligands. This study demonstrates a mechanism by which Wnt/β-catenin signaling controls stem cell–dependent tissue growth non–cell autonomously and advances our understanding of the mechanisms that drive coordinated regeneration.