SummaryWnt signal transduction controls tissue morphogenesis, maintenance and regeneration in all multicellular animals. In mammals, the WNT/CTNNB1 (Wnt/β‐catenin) pathway controls cell proliferation and cell fate decisions before and after birth. It plays a critical role at multiple stages of embryonic development, but also governs stem cell maintenance and homeostasis in adult tissues. However, it remains challenging to monitor endogenous WNT/CTNNB1 signaling dynamics in vivo. Here, we report the generation and characterization of a new knock‐in mouse strain that doubles as a fluorescent reporter and lineage tracing driver for WNT/CTNNB1 responsive cells. We introduced a multi‐cistronic targeting cassette at the 3′ end of the universal WNT/CTNNB1 target gene Axin2. The resulting knock‐in allele expresses a bright fluorescent reporter (3xNLS‐SGFP2) and a doxycycline‐inducible driver for lineage tracing (rtTA3). We show that the Axin2 P2A‐rtTA3‐T2A‐3xNLS‐SGFP2 strain labels WNT/CTNNB1 responsive cells at multiple anatomical sites during different stages of embryonic and postnatal development. It faithfully reports the subtle and dynamic changes in physiological WNT/CTNNB1 signaling activity that occur in vivo. We expect this mouse strain to be a useful resource for biologists who want to track and trace the location and developmental fate of WNT/CTNNB1 responsive stem cells in different contexts.