The proper positioning of organs during development is essential, yet little is known about the regulation of this process in mammals. Using murine tooth development as a model, we have found that cell migration plays a central role in positioning of the organ primordium. By combining lineage tracing, genetic cell ablation, and confocal live imaging, we identified a migratory population of Fgf8-expressing epithelial cells in the embryonic mandible. These Fgf8-expressing progenitors furnish the epithelial cells required for tooth development, and the progenitor population migrates toward a Shh-expressing region in the mandible, where the tooth placode will initiate. Inhibition of Fgf and Shh signaling disrupted the oriented migration of cells, leading to a failure of tooth development. These results demonstrate the importance of intraepithelial cell migration in proper positioning of an initiating organ.