||Adult tissue stem cells (SCs) reside in niches, which through intercellular contacts and signaling, influence SC behavior. Once activated, SCs typically give rise to short-lived transit-amplifying cells (TACs), which then progress to differentiate into their lineages. Here, using single cell RNA-sequencing, we unearth unexpected heterogeneity among SCs and TACs of hair follicles. We trace the roots of this heterogeneity to micro-niches along epithelial-mesenchymal interfaces, where progenitors display molecular signatures reflective of spatially distinct local signals and intercellular interactions. Using lineage-tracing, temporal single cell analyses and chromatin landscaping, we show that SC plasticity becomes restricted in a sequentially and spatially choreographed program, culminating in seven spatially arranged uni-lineage progenitors within TACs of mature follicles. By compartmentalizing SCs into micro-niches, tissues gain precise control over morphogenesis and regeneration: Some progenitors specify lineages immediately; others retain potency, preserving self-renewing features established early while progressively restricting lineages as they experience dynamic changes in microenvironment.