Dry eye disease affects over 16 million adults in the U.S. and the majority of cases are due to Meibomian gland dysfunction. Unfortunately, the identity of the stem cells involved in Meibomian gland development and homeostasis are not well-elucidated. Here, we report that loss of Krox20, a zinc-finger transcription factor involved in development of ectoderm-derived tissues, or deletion of KROX20-expressing epithelial cells disrupts Meibomian gland formation and homeostasis, leading to dry eye disease secondary to Meibomian gland dysfunction. Ablation of Krox20-lineage cells in adult mice also resulted in dry eye disease, implicating Krox20 in homeostasis of the mature Meibomian gland. Lineage tracing and expression analyses revealed a restricted KROX20 expression pattern in the ductal areas of the Meibomian gland, although Krox20-lineage cells generate the full, mature Meibomian gland. This suggests that KROX20 marks a stem/progenitor cell population that differentiates to generate the entire Meibomian gland. Our Krox20 mouse models provide a powerful system that delineated the identity of stem cells required for Meibomian gland development and homeostasis, and can be used to investigate the factors underlying these processes. They are also robust models of Meibomian gland dysfunction-related dry eye disease with a potential for use in pre-clinical therapeutic screening.