Lymphoid enhancer binding factor-1 (Lef1) is an essential regulatory protein in the Wnt signal pathway, which controls cell growth and differentiation. Investigators in the field of skin biology have confirmed that multipotent bulge stem cells (BSCs) are responsible for hair follicle development and regeneration. However, the role of Lef1 remains poorly understood. In this study, we investigated the pattern of Lef1 expression at different stages of the hair growth cycle. Lef1 was strongly expressed during anagen but attenuated in both catagen- and telogen-phase hair follicles in vivo. When stem cells were induced to differentiate toward a hair fate in a co-culture system, Lef1 was notably up-regulated and accumulated in the nucleus, appearing to activate the target protein c-myc and jagged1. Simultaneously, the Wnt and Notch signaling pathways were co-activated, as confirmed by the increased expression of β-catenin and notch1. Plasmids expressing Lef1 and ΔNLef1, a construct in which the β-catenin-binding domain of Lef1 was deleted, were used to evaluate the effects of Lef1 on stem cell differentiation. Lef1 overexpression promoted bulge stem cell differentiation toward a hair fate, which was accompanied by the subsequent migration of β-catenin into the nucleus, whereas no changes were observed in the control group. Taken together, our results demonstrate that Lef1 plays an important role in bulge stem cell differentiation, promoting β-catenin translocation into the nucleus, activating downstream signaling molecules, eventually causing hair follicle bulge stem cells to adopt the hair fate.