Different evolutionary lineages have evolved distinct characteristic body plans and anatomical structures, but their origins are largely elusive. For example, seed plants evolve axillary meristems to enable lateral branching. In moss, the phyllid (leaf) midrib containing specialized cells is responsible for water conduction and support. Midribs function like vascular tissues in flowering plants but may have risen from a different evolutionary path. Here, we demonstrate that midrib formation in the model moss Physcomitrium patens is regulated by orthologs of Arabidopsis LATERAL SUPPRESSOR ( LAS ), a key regulator of axillary meristem initiation. Midribs are missing in loss-of-function mutants, and ectopic formation of midrib-like structures is induced in overexpression lines. Furthermore, the PpLAS / AtLAS genes have conserved functions in the promotion of cell division in both lineages, which alleviates phenotypes in both Physcomitrium and Arabidopsis las mutants. Our results show that a conserved regulatory module is reused in divergent developmental programs, water-conducting and supporting tissues in moss, and axillary meristem initiation in seed plants.