The skin is a classical example of a tissue maintained by stem cells, but the identity of the stem cells that maintain the different epidermal compartments and the signaling mechanisms that control their activity remain unclear. Using lineage tracing and quantitative clonal analyses, we show that the Wnt-target gene Axin2 marks epidermal stem cells that compete neutrally and require Wnt/[beta]-catenin signaling to proliferate. By RNA in situ hybridization, we show that the Axin2-expressing stem cells produce their own self-renewal signals in the form of Wnt proteins. These cells also express secreted Wnt inhibitors, including Dkks, which accumulate at high levels around more differentiated cells. We propose a new model for skin maintenance, in which epidermal stem cells produce short-range Wnt signals to maintain their own identity and function, while simultaneously secreting longer-range inhibitors that suppress Wnt signaling to promote differentiation of the stem cell progeny.