Understanding how epithelial progenitors within exocrine glands establish specific cell lineages and form complex functional secretory units is vital for organ regeneration. Here we identify the transcription factor Sox10 as essential for both the maintenance and differentiation of epithelial KITFGFR2b progenitors into secretory units, containing acinar, myoepithelial, and intercalated duct cells. The KIT/FGFR2b-Sox10 axis marks the earliest multi-potent and tissue-specific progenitors of exocrine glands. Genetic deletion of epithelial Sox10 leads to loss of secretory units, which reduces organ size and function, but the ductal tree is retained. Intriguingly, the remaining duct progenitors do not compensate for loss of Sox10 and lack plasticity to properly form secretory units. However, overexpression of Sox10 in these ductal progenitors enhances their plasticity toward KIT progenitors and induces differentiation into secretory units. Therefore, Sox10 controls plasticity and multi-potency of epithelial KIT cells in secretory organs, such as mammary, lacrimal, and salivary glands.