Ectodermal appendage morphogenesis requires continuous epithelial-mesenchymal cross-talk during development. Canonical Wnt signaling has been shown to be pivotal during this process and its inhibition leads to the absence of any morphological or molecular signs of appendage formation, including hair follicles (HFs). In the mouse, primary HFs arise in utero starting just before E14.5, when the first morphological signs of a placode are discernible. In this study, our goal was to identify novel factors expressed during primary HF morphogenesis. We performed transcriptional profiling of the developing epidermis at 12 h intervals between E12.5 and E15.5. One of the significantly differentially expressed genes was the Wnt inhibitor Dickkopf 4, Dkk4. We show that Dkk4 mRNA increases sharply in the dorso-lateral epidermis around E14 and then decreases until E15.5. Using whole mount in situ hybridization, we show that Dkk4 mRNA is localized to the pre-placodes at sites of presumptive epithelial-mesenchymal interactions during appendage morphogenesis, including the dental lamina, mammary gland, eccrine gland, and primary and secondary HFs. In silico analysis, reporter gene assays as well as in vitro transfections of LEF1 and beta-catenin show that Dkk4 is a potential downstream target of canonical Wnt signaling. In addition, we demonstrate a direct physical interaction between LEF1/beta-catenin complex and the Dkk4 promoter using ChIP. We propose that Dkk4 acts in a negative feedback loop to attenuate canonical Wnt signaling, and may facilitate a switch to the non-canonical Wnt planar cell polarity (PCP) pathway that is involved in cell movements during morphogenesis.