In the field of breast biology, there is a growing appreciation for the "gatekeeping function" of basal cells during development and disease processes yet mechanisms regulating the generation of these cells are poorly understood. Here, we report that the proliferation of basal cells is controlled by SLIT/ROBO1 signaling and that production of these cells regulates outgrowth of mammary branches. We identify the negative regulator TGF-β1 upstream of Robo1 and show that it induces Robo1 expression specifically in the basal layer, functioning together with SLIT2 to restrict branch formation. Loss of SLIT/ROBO1 signaling in this layer alone results in precocious branching due to a surplus of basal cells. SLIT2 limits basal cell proliferation by inhibiting canonical WNT signaling, increasing the cytoplasmic and membrane pools of β-catenin at the expense of its nuclear pool. Together, our studies provide mechanistic insight into how specification of basal cell number influences branching morphogenesis.