Recent studies of epithelial tissues have revealed the presence of tissue-specific stem cells that are able to establish multiple cell lineages within an organ. The stem cells give rise to progenitors that replicate before differentiating into specific cell lineages. The mechanism by which homeostasis is established between proliferating stem or progenitor cells and terminally differentiated cells is unclear. This study demonstrates that Agr2 expression by mucous neck cells in the stomach promotes the differentiation of multiple cell lineages while also inhibiting the proliferation of stem or progenitor cells. When Agr2 expression is absent, gastric mucous neck cells increased in number as does the number of proliferating cells. Agr2 expression loss also resulted in the decline of terminally differentiated cells, which was supplanted by cells that exhibited nuclear SOX9 labeling. Sox9 expression has been associated with progenitor and stem cells. Similar effects of the Agr2 null on cell proliferation in the intestine were also observed. Agr2 consequently serves to maintain the balance between proliferating and differentiated epithelial cells.