Niches are often found in specific positions in tissues relative to the stem cells they support. Consistency of niche position suggests that placement is important for niche function. However, the complexity of most niches has precluded a thorough understanding of how they are placed properly. To address this, we used live-imaging to investigate the formation of a genetically tractable niche, the Drosophila Posterior Signaling Center (PSC), the assembly of which had not been explored previously. This niche controls hematopoietic progenitors of the lymph gland (LG). The cells constituting the PSC were previously shown to be specified laterally in the embryo, but ultimately reside dorsally, at the LG posterior. Here, we show that PSC cells migrate as a tight collective and associate with multiple tissues during their trajectory to the LG posterior. We find that Slit emanating from two extrinsic sources, visceral mesoderm and cardioblasts, is required for the PSC to remain a collective, and for its attachment to cardioblasts during migration. Without proper Slit-Robo signaling, PSC cells disperse, form aberrant contacts, and ultimately fail to reach their stereotypical position near progenitors. Our work characterizes a novel example of niche formation and identifies an extrinsic signaling relay that controls precise niche positioning.