In adult tissues and organs with high turnover rates, the generation of transit-amplifying cell (TAC) populations from self-renewing stem cells drives cell replacement. The role of stem cells is to provide a renewable source of cells that give rise to TACs to provide the cell numbers that are necessary for cell differentiation. Regulation of the formation of TACs is thus fundamental to controlling cell replacement. Here, we analyze the properties of a population of mesenchymal TACs in the continuously growing mouse incisor to identify key components of the molecular regulation that drives proliferation. We show that the polycomb repressive complex 1 acts as a global regulator of the TAC phenotype by its direct action on the expression of key cell-cycle regulatory genes and by regulating Wnt/β-catenin-signaling activity. We also identify an essential requirement for TACs in maintaining mesenchymal stem cells, which is indicative of a positive feedback mechanism.