Regression of the Müllerian duct in the male embryo is one unequivocal effect of anti-Müllerian hormone, a glycoprotein secreted by the Sertoli cells of the testis. This hormone induces ductal epithelial regression through a paracrine mechanism originating in periductal mesenchyme. To probe the mechanisms of action of anti-Müllerian hormone, we have studied the sequence of cellular and molecular events involved in duct regression. Studies were performed in male rat embryos and in transgenic mice overexpressing or lacking anti-Müllerian hormone, both in vivo and in vitro. Anti-Müllerian hormone causes regression of the cranial part of the Müllerian duct whereas it continues to grow caudally. Our work shows that this pattern of regression is correlated with a cranial to caudal gradient of anti-Müllerian hormone receptor protein, followed by a wave of apoptosis spreading along the Müllerian duct as its progresses caudally. Apoptosis is also induced by AMH in female Müllerian duct in vitro. Furthermore, apoptotic indexes are increased in Müllerian epithelium of transgenic mice of both sexes overexpressing the human anti-Müllerian hormone gene, exhibiting a positive correlation with serum hormone concentration. Inversely, apoptosis is reduced in male anti-Müllerian hormone-deficient mice. We also show that apoptosis is a decisive but not sufficient process, and that epitheliomesenchymal transformation is an important event of Müllerian regression. The most striking result of this study is that anti-Müllerian hormone action in peri-Müllerian mesenchyme leads in vivo and in vitro to an accumulation of cytoplasmic beta-catenin. The co-localization of beta-catenin with lymphoid enhancer factor 1 in the nucleus of peri-Müllerian mesenchymal cells, demonstrated in primary culture, suggests that overexpressed beta-catenin in association with lymphoid enhancer factor 1 may alter transcription of target genes and may lead to changes in mesenchymal gene expression and cell fate during Müllerian duct regression. To our knowledge, this is the first report that beta-catenin, known for its role in Wnt signaling, may mediate anti-Müllerian hormone action.