Prostate epithelial basal cells are highly plastic in their luminal differentiation capability. Basal stem cells actively produce luminal cells during organogenesis, but become restricted in the adult prostate unless receiving oncogenic or inflammatory stimuli. Given that the number of luminal cells increases relative to basal cells through development and that equilibrium is reached in the adulthood, we hypothesize that a negative-feedback mechanism exists to inhibit basal-to-luminal differentiation. We provide evidence supporting this hypothesis by comparing murine prostatic growth in a tissue reconstitution assay with cell recombinants of different basal-to-luminal ratios. Additionally, in organoid culture, hybrid organoids derived from adjacent basal and luminal cells showed reduced basal stem cell activities, suggesting contact inhibition. Importantly, removal of adult luminal cells in vivo via either an inducible Cre/loxP-Dre/rox dual-lineage-tracing system or orthotopic trypsin injection led to robust reactivation of basal stem cell activities, which acts independent of androgen. These data illustrate the prostate organ as a distinctive paradigm where cell contact from differentiated daughter cells restricts adult stem cell multipotency to maintain the steady-state epithelial architecture.