Stem cells self-renew and produce daughter cells that differentiate. How stem cells are specified and maintained is a central question in developmental biology. Plant stem cells occupy a small region or niche in larger zones of mitotic activity called meristems. Here we provide molecular evidence that in the Arabidopsis root meristem, the stem cell population depends on a central group of cells, the quiescent center (QC), which positions the stem cell niche. We show that the putative transcription factor SCARECROW (SCR), first identified by its role in radial patterning, is required cell-autonomously for distal specification of the QC, which in turn regulates stem cell fate of immediately surrounding cells.