Background: Growing evidence suggests that excessive inflammation hampers the regenerative capacity of periodontal ligament cells (PDLCs) and that activation of the Wnt/β-catenin pathway is crucial in suppressing immune dysregulation. Objective: This study aimed to establish the role of the Wnt/β-catenin in regulating the immune microenvironment and its subsequent impact on periodontal regeneration. Methods: Lithium chloride (LiCl, Wnt activator) was administered daily into the standard periodontal defects created in 12-week-old Lewis rats. Harvested at 1-week and 2-week post-surgery, samples were then subjected to histological and immunohistochemical evaluation of macrophage distribution and phenotype (pro-inflammatory M1 and anti-inflammatory M2). A murine macrophage cell line, RAW 264.7, was stimulated with LiCl to activate Wnt/β-catenin. Following treatment with the conditioned medium derived from the LiCl-activated macrophages, the expression of bone- and cementum-related markers of the PDLCs was determined. The involvement of Wnt/β-catenin in the immunoregulation and autophagic activity was further investigated with the addition of cardamonin, a commercially available Wnt inhibitor. Results: A significantly increased number of macrophages were detected around the defects during early healing upon receiving the Wnt/β-catenin signaling cue. The defect sites in week 2 exhibited fewer M1 and more M2 macrophages along with an enhanced regeneration of alveolar bone and cementum in the Wnt/β-catenin activation group. LiCl-induced immunomodulatory effect was accompanied with the activation Wnt/β-catenin signaling, which was suppressed in the presence of Wnt inhibitor. Exposure to LiCl could induce autophagy in a dose-dependent manner, thus maintaining macrophages in a regulatory state. The expression level of bone- and cementum-related markers was significantly elevated in PDLCs stimulated with LiCl-activated macrophages. Conclusion: The application of Wnt activator LiCl facilitates the recruitment of macrophages to defect sites and regulates their phenotypic switching in favor of periodontal regeneration. Suppression of Wnt/β-catenin pathway could attenuate the LiCl-induced immunomodulatory effect. Taken together, the Wnt/β-catenin pathway may be targeted for therapeutic interventions in periodontal diseases.