In Arabidopsis thaliana, the stem cell population of the shoot system is controlled by regulatory circuitry involving the WUSCHEL (WUS) and CLAVATA (CLV1-3) genes. WUS signals from the organizing center (OC) to promote stem cell fate at the meristem apex. Stem cells express the secreted peptide CLV3 that activates a signal transduction cascade to restrict WUS expression, thus providing a feedback mechanism. Stem cell homeostasis is proposed to be achieved by balancing these signals. We tested the dynamics of CLV3 signaling using an inducible gene expression system. We show here that increasing the CLV3 signal can very rapidly repress WUS expression during development, which in turn causes a fast reduction of CLV3 expression. We demonstrate that increased CLV3 signaling restricts meristem growth and promotes allocation of peripheral meristem cells into organ primordia. In addition, we extend the current model for stem cell control by showing that meristem homeostasis tolerates variation in CLV3 levels over a 10-fold range and that high-level CLV3 signaling can be partially compensated with time, indicating that the level of CLV3 expression communicates only limited information on stem cell number to the underlying OC cells.