Cellular interactions are key for the differentiation of distinct cell types within developing epithelia, yet the molecular mechanisms engaged in these interactions remain poorly understood. In the developing olfactory epithelium (OE), neural stem/progenitor cells give rise to odorant-detecting olfactory receptor neurons (ORNs) and glial-like sustentacular (SUS) cells. Here, we show in mice that the transmembrane receptor neogenin (NEO1) and its membranebound ligand RGMB control the balance of neurons and glial cells produced in the OE. In this layered epithelium, neogenin is expressed in progenitor cells, while RGMB is restricted to adjacent newly born ORNs. Ablation of Rgmb via gene-targeting increases the number of dividing progenitor cells in the OE and leads to supernumerary SUS cells. Neogenin loss-of-function phenocopies these effects observed in Rgmb −/− mice, supporting the proposal that RGMB-neogenin signaling regulates progenitor cell numbers and SUS cell production. Interestingly, Neo1−/− mice also exhibit increased apoptosis of ORNs, implicating additional ligands in the neogenin-dependent survival of ORNs. Thus, our results indicate that RGMB-neogenin-mediated cellcell interactions between newly born neurons and progenitor cells control the ratio of glia and neurons produced in the OE.