Quiescent stem cells have been found in multiple adult organs, and activation of these stem cells is critical to the restoration of damaged tissues in response to injury or stress. Existing evidence suggests that extrinsic cues from the extracellular matrix or supporting cells of various stem cell niches may interact with intrinsic components to initiate stem cell differentiation, but the molecular and cellular mechanisms regulating their activation are not fully understood. In the present study, we find that olfactory horizontal basal cells (HBCs) are stimulated by neural glial-related cell adhesion molecules (NrCAMs). NrCAM activation requires matrix metalloproteases (MMPs) and epidermal growth factor receptors (EGFRs). Inhibiting MMP activity or EGFR activation not only blocks HBC proliferation in the cultured olfactory organoids, but also severely suppresses HBC proliferation in the olfactory epithelium following methimazole-induced injury, resulting in a delay of olfactory mucosa reconstitution and functional recovery of the injured mice. Both NrCAMs and EGFR are expressed by the HBCs and their expression increases upon injury. Our data indicate that MMP-mediated cleavage of NrCAMs serves as an autocrine or paracrine signal that activates EGFRs on HBCs to trigger HBC proliferation and differentiation to reconstruct the entire olfactory epithelium following injury.