Shoot branching requires the establishment of new meristems harboring stem cells; this phenomenon raises questions about the precise regulation of meristematic fate. In seed plants, these new meristems initiate in leaf axils to enable lateral shoot branching. Using live-cell imaging of leaf axil cells, we show that the initiation of axillary meristems requires a meristematic cell population continuously expressing the meristem marker SHOOT MERISTEMLESS (STM). The maintenance of STM expression depends on the leaf axil auxin minimum. Ectopic expression of STM is insufficient to activate axillary buds formation from plants that have lost leaf axil STM expressing cells. This suggests that some cells undergo irreversible commitment to a developmental fate. In more mature leaves, REVOLUTA (REV) directly up-regulates STM expression in leaf axil meristematic cells, but not in differentiated cells, to establish axillary meristems. Cell type-specific binding of REV to the STM region correlates with epigenetic modifications. Our data favor a threshold model for axillary meristem initiation, in which low levels of STM maintain meristematic competence and high levels of STM lead to meristem initiation.