During tissue morphogenesis and differentiation, cells must self-renew while contemporaneously generating daughters that contribute to the growing tissue. How tissues achieve this precise balance between proliferation and differentiation is, in most instances, poorly understood. This is in part due to the difficulties in dissociating the mechanisms that underlie tissue patterning from those that regulate proliferation. In the migrating posterior lateral line primordium (PLLP), proliferation is predominantly localised to the leading zone. As cells emerge from this zone, they periodically organise into rosettes that subsequently dissociate from the primordium and differentiate as neuromasts. Despite this reiterative loss of cells, the primordium maintains its size through regenerative cell proliferation until it reaches the tail. In this study, we identify a null mutation in the Wnt-pathway transcription factor Lef1 and show that its activity is required to maintain proliferation in the progenitor pool of cells that sustains the PLLP as it undergoes migration, morphogenesis and differentiation. In absence of Lef1, the leading zone becomes depleted of cells during its migration leading to the collapse of the primordium into a couple of terminal neuromasts. We show that this behaviour resembles the process by which the PLLP normally ends its migration, suggesting that suppression of Wnt signalling is required for termination of neuromast production in the tail. Our data support a model in which Lef1 sustains proliferation of leading zone progenitors, maintaining the primordium size and defining neuromast deposition rate.