Epithelial stem cells reside in specific niches that regulate their self-renewal and differentiation, and are responsible for the continuous regeneration of tissues such as hair, skin, and gut. Although the regenerative potential of mammalian teeth is limited, mouse incisors grow continuously throughout life and contain stem cells at their proximal ends in the cervical loops. In the labial cervical loop, the epithelial stem cells proliferate and migrate along the labial surface, differentiating into enamel-forming ameloblasts. In contrast, the lingual cervical loop contains fewer proliferating stem cells, and the lingual incisor surface lacks ameloblasts and enamel. Here we have used a combination of mouse mutant analyses, organ culture experiments, and expression studies to identify the key signaling molecules that regulate stem cell proliferation in the rodent incisor stem cell niche, and to elucidate their role in the generation of the intrinsic asymmetry of the incisors. We show that epithelial stem cell proliferation in the cervical loops is controlled by an integrated gene regulatory network consisting of Activin, bone morphogenetic protein (BMP), fibroblast growth factor (FGF), and Follistatin within the incisor stem cell niche. Mesenchymal FGF3 stimulates epithelial stem cell proliferation, and BMP4 represses Fgf3 expression. In turn, Activin, which is strongly expressed in labial mesenchyme, inhibits the repressive effect of BMP4 and restricts Fgf3 expression to labial dental mesenchyme, resulting in increased stem cell proliferation and a large, labial stem cell niche. Follistatin limits the number of lingual stem cells, further contributing to the characteristic asymmetry of mouse incisors, and on the basis of our findings, we suggest a model in which Follistatin antagonizes the activity of Activin. These results show how the spatially restricted and balanced effects of specific components of a signaling network can regulate stem cell proliferation in the niche and account for asymmetric organogenesis. Subtle variations in this or related regulatory networks may explain the different regenerative capacities of various organs and animal species.