Background: The homologous proteins identified as cellular retinoic acid-binding proteins I and II (CRABP-I and CRABP-II) belong to a subset of intracellular proteins characterized by their robust affinity for retinoic acid, which plays an indispensable role in the development of hair follicle, including differentiation, proliferation, and apoptosis in keratinocytes. Previous research on Hu sheep hair follicles revealed the specific expression CRABP1 in dermal papilla cells (DPCs), suggesting that CRABP1 has a potential role in regulating the DPC population. Therefore, the main purpose of this study is to expose the performance of the CRABP1 genes in the development and proliferation of DPCs. Methods: Initially, overexpression and inhibition of CRABP1 in the DPCs were conducted through overexpression vector and siRNA. CCK-8, EDU, and RT-PCR cell cycle assays and immunostaining were performed to evaluate the proliferation and cell cycle of dermal papilla cells (DPCs). Although, the influence of CRABP1 upon β-catenin in dermal papilla cells (DPCs) was found using immunofluorescence labeling. Finally, RT-PCR was conducted to assess the impact of CRABP1 on the expression levels of CTNNB1, TCF4, and LEF1 in DPCs involved in the Wnt/β-catenin signaling pathway. Results: The results showed that CRABP1 overexpression promotes the growth rates of DPCs and significantly enhances the proportion of S-phase cells compared with the control group (p < 0.05). The results were the opposite when CRABP1 was a knockdown. In contrast, there was a significant decline in the mRNA expression levels of CTNNβ1, LEF1 (p < 0.05), and TCF4 (p < 0.01) by CRABP1 knockdown. Conclusions: This study found that CRABP1 influences the expression of important genes within the Wnt/β-catenin signaling pathway and promotes DPC proliferation. This investigation provides a theoretical framework to explain the mechanisms that control hair follicle morphogenesis and development.