<p>Endometrial regeneration is essential for reproductive cycles and pregnancies, allowing the endometrium to undergo estrogen-driven repair, growth, and renewal after menstruation and parturition. Epithelial cells lining the uterine cavity undergo apoptosis during estrous cycles, and remnant cells can quickly restore this lining through a process known as re-epithelialization. It is presumed that adult stem/progenitor cells in the uterine stroma also contribute to re-epithelialization. However, the specific cell type(s) and the underlying mechanisms have not been determined. Herein, we use genetic lineage tracing assays in mice to identify <i>Nestin</i>⁺ perivascular cells as active contributors to re-epithelialization. Notch signaling maintains <i>Nestin</i>⁺ perivascular cells in a quiescent state, but these cells re-enter the cell cycle and differentiate into epithelial cells via estrogen-stimulated suppression of Notch signaling dependent on estrogen receptor alpha (ESR1). These findings demonstrate that perivascular cells support re-epithelialization and reveal a mechanism regulating the quiescence and activation of uterine perivascular cells.</p>