The variability of shoot architecture in plants is striking and one of the most extreme examples of adaptive growth in higher organisms. Mediated by the differential activity of apical and lateral meristems, flexibility in stem growth essentially contributes to this variability. In spite of this importance, the regulation of major events in stem development is largely unexplored. Recently, however, novel approaches exploiting knowledge from root and leaf development are starting to shed light on molecular mechanisms that regulate this essential plant organ. In this review, we summarize our understanding of initial patterning events in stems, discuss prerequisites for the initiation of lateral stem growth and highlight the burning questions in this context.