Stem cell proliferation and differentiation must be carefully balanced to support tissue maintenance and growth. Defective stem cell regulation may underpin diseases in many organs, including the skin. LRIG1-expressing stem cells residing in the hair follicle junction zone (JZ) support sebaceous gland homeostasis. An emerging hypothesis from observations in both mice and human holds that imbalances in key stem cell regulatory pathways such as Wnt signaling may lead to abnormal fate determination of these LRIG1+ve cells. They accumulate and form cystic structures in the JZ that are similar to the comedones found in human acne. To test the possible involvement of Wnt signals in this scenario, we used the Lrig1-CreERT2 mouse line to modulate Wnt signaling in JZ stem cells. We observed that persistent activation of Wnt signaling leads to JZ cyst formation, with associated sebaceous gland atrophy. The cysts strongly express stem cell markers and can be partially reduced by all-trans retinoic acid treatment as well as by Hedgehog signaling inhibition. Conversely, loss of Wnt signaling leads to enlargement of JZ, infundibulum, and sebaceous glands. These data implicate abnormal Wnt signaling in the generation of mouse pathologies that resemble human acne and respond to acne treatments.