The Arabidopsis class-1 KNOX gene SHOOT MERISTEMLESS (STM) encodes a homeodomain transcription factor essential for shoot apical meristem (SAM) formation and sustained activity. STM activates cytokinin (CK) biosynthesis in the SAM, but the extent to which STM function is mediated through CK is unclear. Here we show that STM inhibits cellular differentiation and endoreduplication, acting through CK and the CK-inducible CYCD3 cell cycle regulators, establishing a mechanistic link to cell cycle control which provides sustained mitotic activity to maintain a pool of undifferentiated cells in the SAM. Equivalent functions are revealed for the related KNOX genes KNAT1/BP and KNAT2 through ectopic expression. STM is also required for proper meristem organisation and can induce de novo meristem formation when expressed ectopically, even when CK levels are reduced or CK signaling is impaired. This function in meristem establishment and organisation can be replaced by KNAT1/BP, but not KNAT2, despite its activation of CK responses, suggesting that promotion of CK responses alone is insufficient for SAM organisation. We propose that STM has dual cellular and meristem-organisational functions that are differentially represented in the class-1 KNOX gene family and have differing requirements for CK and CYCD3.