The sense of taste is mediated by multicellular taste buds located within taste papillae on the tongue. In mice, individual taste buds reside in fungiform papillae, which develop at mid-gestation as epithelial placodes in the anterior tongue. Taste placodes comprise taste bud precursor cells, which express the secreted factor sonic hedgehog (Shh) and give rise to taste bud cells that differentiate around birth. We showed previously that epithelial activation of β-catenin is the primary inductive signal for taste placode formation, followed by taste papilla morphogenesis and taste bud differentiation, but the degree to which these later elements were direct or indirect consequences of β-catenin signaling was not explored. Here, we define discrete spatiotemporal functions of β-catenin in fungiform taste bud development. Specifically, we show that early epithelial activation of β-catenin, before taste placodes form, diverts lingual epithelial cells from a taste bud fate. By contrast, β-catenin activation a day later within Shh + placodes, expands taste bud precursors directly, but enlarges papillae indirectly. Further, placodal activation of β-catenin drives precocious differentiation of Type I glial-like taste cells, but not other taste cell types. Later activation of β-catenin within Shh + precursors during papilla morphogenesis also expands taste bud precursors and accelerates Type I cell differentiation, but papilla size is no longer enhanced. Finally, although Shh regulates taste placode patterning, we find that it is dispensable for the accelerated Type I cell differentiation induced by β-catenin.