The homeodomain transcription factor WUSCHEL (WUS) defines the shoot stem cell niche, but the mechanisms underlying the establishment of WUS expression remain unclear. Here, we show that cytokinin signaling precedes WUS expression in leaf axils, and activates WUS expression de novo in the leaf axil to promote axillary meristem initiation. Furthermore, type-B Arabidopsis response regulator proteins (ARRs), which are transcriptional activators in the cytokinin signaling pathway, directly bind to the WUS promoter and activate its expression. Finally, we show that cytokinin activation of WUS in the leaf axil correlates with increased histone acetylation and methylation markers associated with transcriptional activation, supporting that WUS expression requires a permissive epigenetic environment to restrict it to highly defined meristematic tissues. Taken together, these findings explain how cytokinin regulates axillary meristem initiation, and establish a mechanistic framework for the postembryonic establishment of the shoot stem cell niche.