Teeth form as epithelial appendages and the mechanisms regulating their development share similarities with other organs such as hairs, glands, and gut. However, the regenerative potential of mammalian teeth is generally limited. Stem cells have been identified in the epithelium of continuously growing incisors of mice. We have identified a network of signalling molecules that regulates the proliferation and differentiation of these stem cells, and that thereby influences the incisors' growth and enamel formation. The signals, including FGFs, BMPs, and Activin, mediate interactions between the mesenchymal and epithelial cells within the stem cell niche and form an integrated network. Follistatin antagonizes the functions of BMPs and Activin, and is a key regulator of the asymmetry of the incisor structure. The evolutionary variation in the growth capacity of teeth and the extent of enamel deposition may have resulted from fine-tuning of this signal network. In addition, subtle variations in this or in related regulatory networks may explain the different regenerative capacities of various organs and animal species.