The dentate gyrus, a gateway for input to the hippocampal formation, arises from progenitors in the medial telencephalic neuroepithelium adjacent to the cortical hem. Dentate progenitors navigate a complex migratory path guided by two cell populations that arise from the hem, the fimbrial glia and Cajal-Retzius (CR) cells. As the hem expresses multiple Wnt genes, we examined whether β-catenin, which mediates canonical Wnt signaling and also participates in cell adhesion, is necessary for the development of hem-derived lineages. We report that, in mice, the fimbrial glial scaffold is disorganized and CR cells are mispositioned upon hem-specific disruption of β-catenin. Consequently, the dentate migratory stream is severely affected, and the dentate gyrus fails to form. Using selective Cre drivers, we further determined that β-catenin function is required in the fimbrial glial scaffold, but not in the CR cells, for guiding the dentate migration. Our findings highlight a primary requirement for β-catenin for the organization of the fimbrial scaffold and a secondary role for this factor in dentate gyrus morphogenesis.