Animal color patterns are strikingly diverse and can serve as a useful model for understanding how tissues acquire positional information. Here, we study the coat of the African striped mouse (Rhabdomys pumilio) to uncover mechanisms regulating the formation of stripe patterns. By combining transcriptomic profiling, mathematical modeling, mouse transgenics, and in vivo gene editing in striped mice, we show that the Wnt modulator, Sfrp2, plays two distinct roles in stripe patterning. During embryogenesis, it regulates patterns of hair placode formation, producing the embryonic prepattern that foreshadows pigment stripes while, in postnatal stages, it modulates differences in hair color. This dual effect is achieved through spatiotemporal shifts in expression and opposing effects on Wnt signaling within the same tissue. Thus, by uncovering a multifunctional regulator of stripe formation, our work provides insights into the mechanisms by which spatial patterns are established in developing embryos and the molecular basis of phenotypic novelty.