Vascular meristems generate the majority of biomass in higher plants. They constitute a bifacial stem cell population from which xylem and phloem are specified on opposing sides by positional signals. The PHLOEM INTERCALATED WITH XYLEM (PXY) receptor kinase promotes vascular cell division and organisation. However, how these functions are specified and integrated is unknown. Here, a putative PXY-mediated transcriptional regulatory network comprised of 690 transcription factor-promoter interactions was mapped. Among these interactions was a feed-forward loop containing transcription factors WUSCHEL HOMEOBOX RELATED 14 (WOX14) and TARGET OF MONOPTEROS 6 (TMO6), which each regulate the expression of a third transcription factor, LATERAL ORGAN BOUNDARIES DOMAIN 4 (LBD4). PXY signalling in turn regulates the WOX14, TMO6, LBD4 loop to control vascular proliferation. Genetic interaction between LBD4 and PXY suggests that LBD4 marks the phloem-procambium boundary, thus defining the shape of the vascular bundle. These data collectively support a novel mechanism that influences recruitment of cells into the phloem lineage, and defines the role of PXY signalling in this context to the arrangement of vascular tissue.