WUS and WOX5, which are expressed, respectively, in the organizing center (OC) and the quiescent center (QC), are essential for shoot/root apical stem-cell maintenance in flowering plants. However, little is known about how these stem-cell factors evolved their functions in flowering plants. Here, we show that the WUS/WOX5 proteins acquired two distinct capabilities by a two-step functional innovation process in the course of plant evolution. The first-step is the apical stem-cell maintenance activity of WUS/WOX5, which originated in the common ancestor of ferns and seed plants, as evidenced by the interspecies complementation experiments, showing that ectopic expression of fern Ceratopteris richardii WUS-like (CrWUL) surrounding OC/QC, or exclusive OC-/QC-expressed gymnosperms/angiosperms WUS/WOX5 in Arabidopsis wus-1 and wox5-1 mutants, could rescue their phenotypes. The second-step is the intercellular mobility that emerged in the common ancestor of seed plants after divergence from the ferns. Evidence for this includes confocal imaging of GFP fusion proteins, showing that WUS/WOX5 from seed plants, rather than from the fern CrWUL, can migrate into cells adjacent to the OC/QC. Evolutionary analysis showed that the WUS-like gene was duplicated into two copies prior to the divergence of gymnosperms/angiosperms. Then the two gene copies (WUS and WOX5) have undergone similar levels of purifying selection, which is consistent with their conserved functions in angiosperm shoot/root stem-cell maintenance and floral organ formation. Our results highlight the critical roles and the essential prerequisites that the two-step functional innovation of these genes performs and represents in the origin of flowering plants.