The sense of taste is fundamental to our ability to ingest nutritious substances and to detect and avoid potentially toxic ones. Sensory taste buds are housed in papillae that develop from epithelial placodes. Three distinct types of gustatory papillae reside on the rodent tongue: small fungiform papillae are found in the anterior tongue, whereas the posterior tongue contains the larger foliate papillae and a single midline circumvallate papilla (CVP). Despite the great variation in the number of CVPs in mammals, its importance in taste function, and its status as the largest of the taste papillae, very little is known about the development of this structure. Here, we report that a balance between Sprouty (Spry) genes and Fgf10, which respectively antagonize and activate receptor tyrosine kinase (RTK) signaling, regulates the number of CVPs. Deletion of Spry2 alone resulted in duplication of the CVP as a result of an increase in the size of the placode progenitor field, and Spry1(-/-);Spry2(-/-) embryos had multiple CVPs, demonstrating the redundancy of Sprouty genes in regulating the progenitor field size. By contrast, deletion of Fgf10 led to absence of the CVP, identifying FGF10 as the first inductive, mesenchyme-derived factor for taste papillae. Our results provide the first demonstration of the role of epithelial-mesenchymal FGF signaling in taste papilla development, indicate that regulation of the progenitor field size by FGF signaling is a critical determinant of papilla number, and suggest that the great variation in CVP number among mammalian species may be linked to levels of signaling by the FGF pathway.