The overall morphology of an Arabidopsis plant depends on the behaviour of its meristems. Meristems derived from the shoot apex can develop into either shoots or flowers. The distinction between these alternative fates requires separation between the function of floral meristem identity genes and the function of an antagonistic group of genes, which includes TERMINAL FLOWER 1. We show that the activities of these genes are restricted to separate domains of the shoot apex by different mechanisms. Meristem identity genes, such as LEAFY, APETALA 1 and CAULIFLOWER, prevent TERMINAL FLOWER 1 transcription in floral meristems on the apex periphery. TERMINAL FLOWER 1, in turn, can inhibit the activity of meristem identity genes at the centre of the shoot apex in two ways; first by delaying their upregulation, and second, by preventing the meristem from responding to LEAFY or APETALA 1. We suggest that the wild-type pattern of TERMINAL FLOWER 1 and floral meristem identity gene expression depends on the relative timing of their upregulation.