Maintenance of adult tissues depends on sustained activity of resident stem cell populations, but the mechanisms that regulate stem cell self-renewal during homeostasis remain largely unknown. Using an imaging and tracking approach that captures all epidermal stem cell activity in large regions of living mice, we show that self-renewal is locally coordinated with epidermal differentiation, with a lag time of 1 to 2 days. In both homeostasis and upon experimental perturbation, we find that differentiation of a single stem cell is followed by division of a direct neighbor, but not vice versa. Finally, we show that exit from the stem cell compartment is sufficient to drive neighboring stem cell self-renewal. Together, these findings establish that epidermal stem cell self-renewal is not the constitutive driver of homeostasis. Instead, it is precisely tuned to tissue demand and responds directly to neighbor cell differentiation.