The mammary gland experiences substantial remodeling and regeneration during development and reproductive life, facilitated by stem cells and progenitors that act in concert with physiological stimuli. While studies have focused on deciphering regenerative cells within the parenchymal epithelium, cell lineages in the stroma that may directly contribute to epithelial biology is unknown. Here we identify, in mouse, the transition of a PDGFRα⁺ mesenchymal cell population into mammary epithelial progenitors. In addition to being adipocyte progenitors, PDGFRα⁺ cells make a de novo contribution to luminal and basal epithelia during mammary morphogenesis. In the adult, this mesenchymal lineage primarily generates luminal progenitors within lobuloalveoli during sex hormone exposure or pregnancy. We identify cell migration as a key molecular event that is activated in mesenchymal progenitors in response to epithelium-derived chemoattractant. These findings demonstrate a stromal reservoir of epithelial progenitors and provide insight into cell origins and plasticity during mammary tissue growth.