Embryonic development is controlled by a small set of signal transduction pathways, with vastly different phenotypic outcomes depending on the time and place of their recruitment. How the same molecular machinery can elicit such specific and distinct responses, remains one of the outstanding questions in developmental biology. Part of the answer may lie in the high inherent genetic complexity of these signaling cascades, as observed for the Wnt-pathway. The mammalian genome encodes multiple Wnt proteins and receptors, each of which show dynamic and tightly controlled expression patterns in the embryo. Yet how these components interact in the context of the whole organism remains unknown. Here we report the generation of a novel, inducible transgenic mouse model that allows spatiotemporal control over the expression of Wnt5a, a protein implicated in many developmental processes and multiple Wnt-signaling responses. We show that ectopic Wnt5a expression from E10.5 onwards results in a variety of developmental defects, including loss of hair follicles and reduced bone formation in the skull. Moreover, we find that Wnt5a can have dual signaling activities during mouse embryonic development. Specifically, Wnt5a is capable of both inducing and repressing β-catenin/TCF signaling in vivo, depending on the time and site of expression and the receptors expressed by receiving cells. These experiments show for the first time that a single mammalian Wnt protein can have multiple signaling activities in vivo, thereby furthering our understanding of how signaling specificity is achieved in a complex developmental context.