In angiosperms, after the floral transition, the inflorescence meristem produces floral meristems (FMs). Determinate growth of FMs produces flowers of a particular size and form. This determinate growth requires specification of floral organs and termination of stem-cell divisions. Establishment of the FM and specification of outer whorl organs (sepals and petals) requires the floral homeotic gene APETALA1 (AP1). To determine FM identity, AP1 also prevents the formation of flowers in the axils of sepals. The mechanisms underlying AP1 function in the floral transition and in floral organ patterning have been studied extensively, but how AP1 terminates sepal axil stem-cell activities to suppress axillary secondary flower formation remains unclear. Here we show that AP1 regulates cytokinin levels by directly suppressing the cytokinin biosynthetic gene LONELY GUY1 and activating the cytokinin degradation gene CYTOKININ OXIDASE/DEHYDROGENASE3. Restoring the expression of these genes to wild-type levels in AP1-expressing cells or suppressing cytokinin signaling inhibits indeterminate inflorescence meristem activity caused by ap1 mutation. We conclude that suppression of cytokinin biosynthesis and activation of cytokinin degradation mediates AP1 function in establishing determinate FM. A deeper understanding of axil-lateral meristem activity provides crucial information for enhancing yield by engineering crops that produce more elaborated racemes.