Parasympathetic innervation is critical for submandibular gland (SMG) development and regeneration. Parasympathetic ganglia (PSG) are derived from Schwann cell precursors that migrate along nerves, differentiate into neurons, and coalesce within their target tissue to form ganglia. However, signals that initiate gangliogenesis after the precursors differentiate into neurons are unknown. We found that deleting negative regulators of FGF signaling, Sprouty1 and Sprouty2 (Spry1/2DKO), resulted in a striking loss of gangliogenesis, innervation, and keratin 5-positive (K5+) epithelial progenitors in the SMG. Here we identify Wnts produced by K5+ progenitors in the SMG as key mediators of gangliogenesis. Wnt signaling increases survival and proliferation of PSG neurons, and inhibiting Wnt signaling disrupts gangliogenesis and organ innervation. Activating Wnt signaling and reducing FGF gene dosage rescues gangliogenesis and innervation in both the Spry1/2DKO SMG and pancreas. Thus, K5+ progenitors produce Wnt signals to establish the PSG-epithelial communication required for organ innervation and progenitor cell maintenance.