How the dorsal-ventral axis of the vertebrate jaw, particularly the position of tooth initiation site, is established remains a critical and unresolved question. Tooth development starts with the formation of the dental lamina, a localized thickened strip within the maxillary and mandibular epithelium. To identify transcriptional regulatory networks (TRN) controlling the specification of dental lamina from the naïve mandibular epithelium, we utilized Laser Microdissection coupled low-input RNA-seq (LMD-RNA-seq) to profile gene expression of different domains of the mandibular epithelium along the dorsal-ventral axis. We comprehensively identified transcription factors (TFs) and signaling pathways that are differentially expressed along mandibular epithelial domains (including the dental lamina). Specifically, we found that the TFs Sox2 and Tfap2 (Tfap2a/Tfap2b) formed complimentary expression domains along the dorsal-ventral axis of the mandibular epithelium. Interestingly, both classic and novel dental lamina specific TFs-such as Pitx2, Ascl5 and Zfp536-were found to localize near the Sox2:Tfap2a/Tfap2b interface. To explore the functional significance of these domain specific TFs, we next examined loss-of-function mouse models of these domain specific TFs, including the dental lamina specific TF, Pitx2, and the ventral surface ectoderm specific TFs Tfap2a and Tfap2b. We found that disruption of domain specific TFs leads to an upregulation and expansion of the alternative domain's TRN. The importance of this cross-repression is evident by the ectopic expansion of Pitx2 and Sox2 positive dental lamina structure in Tfap2a/Tfap2b ectodermal double knockouts and the emergence of an ectopic tooth in the ventral surface ectoderm. Finally, we uncovered an unappreciated interface of mesenchymal SHH and WNT signaling pathways, at the site of tooth initiation, that were established by the epithelial domain specific TFs including Pitx2 and Tfap2a/Tfap2b. These results uncover a previously unknown molecular mechanism involving cross-repression of domain specific TFs including Pitx2 and Tfap2a/Tfap2b in patterning the dorsal-ventral axis of the mouse mandible, specifically the regulation of tooth initiation site.