In warm-blooded vertebrate embryos (mammals and birds), the body forms from a growth zone at the tail end. Hensen’s node, a region which induces and patterns the neural axis is located within this growth zone. The node also contains the precursors of neural, mesodermal and endodermal structures along the midline and has been suggested to contain a small population of resident stem cells. However, it is unknown whether the rest of the node constitutes an instructive stem cell niche, specifying stem cell behaviour. Here we combine transplantation of a single cell in vivo with single-cell mRNA sequencing in the chick and show that when made to enter the node, non-node-progenitor cells become resident and gain stem cell behaviour. These cells preferentially express G2/M phase cell-cycle related genes and are concentrated in posterior sub-regions of the node. The posterior part of the node therefore behaves as an instructive stem cell niche. These results demonstrate a new function for the vertebrate node during development.