Most organs rely on stem cells to maintain homeostasis during post-embryonic life. Typically, stem cells of independent lineages work coordinately within mature organs to ensure proper ratios of cell types. Little is known, however, on how these different stem cells locate to forming organs during development. Here we show that neuromasts of the posterior lateral line in medaka are composed of two independent life-long lineages with different embryonic origins. Clonal analysis and 4D imaging revealed a hierarchical organisation with instructing and responding roles: an inner, neural lineage induces the formation of an outer, border cell lineage (nBC) from the skin epithelium. Our results demonstrate that the neural lineage is necessary and sufficient to generate nBCs highlighting self-organisation principles at the level of the entire embryo. We hypothesise that induction of surrounding tissues plays a major role during the establishment of vertebrate stem cell niches.