Maintenance of progenitor cell properties in development is required for proper organogenesis of most organs, including those derived from the endoderm. FGF10 has been shown to play a role in both lung and pancreatic development. Here we find that FGF10 signaling controls stomach progenitor maintenance, morphogenesis and cellular differentiation. Through a characterization of the initiation of terminal differentiation of the three major gastric regions in the mouse, forestomach, corpus and antrum, we first describe the existence of a "secondary transition" event occurring in mouse stomach between E15.5 and E16.5. This includes the formation of terminally differentiated squamous cells, parietal, chief and gastric endocrine cells from a pre-patterned gastric progenitor epithelium. Expression analysis of both FGF and Notch signaling components suggested a role of these networks in such progenitors, which was tested through ectopically expressing FGF10 in the developing posterior stomach. These data provide evidence that gastric gland specification and progenitor cell maintenance is controlled by FGF10. The glandular proliferative niche was disrupted in pPDX-FGF10(FLAG) mice leading to aberrant gland formation, and endocrine and parietal cell differentiation was attenuated. These effects were paralleled by changes in Hes1, Shh and Wnt6 expression, suggesting that FGF10 acts in concert with multiple morphogenetic signaling systems during gastric development.