Extracellular matrix (ECM) is an important component of stem cell niche. Remodeling of ECM mediated by ECM regulators, such as matrix metalloproteinases (MMPs) plays a vital role in stem cell function. However, the mechanisms that modulate the function of ECM regulators in the stem cell niche are understudied. Here, we explored the role of the transcription factor (TF) ETS-1, which is expressed in the cathepsin-positive cell population, in regulating the expression of the ECM regulator, mt-mmpA, thereby modulating basement membrane thickness. In planarians, the basement membrane around the gut/inner parenchyma is thought to act as a niche for pluripotent stem cells. It has been shown that the early epidermal progenitors migrate outwards from this region and progressively differentiate to maintain the terminal epidermis. Our data shows that thickening of the basement membrane in the absence of ets-1 results in defective migration of stem cell progeny. Furthermore, the absence of ets-1 leads to a defective epidermal progenitor landscape, despite its lack of expression in those cell types. Together, our results demonstrate the active role of ECM remodeling in regulating tissue homeostasis and regeneration in the planarian Schmidtea mediterranea.