A paper towel dispenser dispenses towels from a paper supply and includes a dispenser housing a low-reserve indicator mechanism for indicating when a reserve quantity of the paper supply is low. The dispenser housing has a housing wall structure on which the low-reserve indicator mechanism is affixed. The paper supply has vertically super imposed edge portions which form an outwardly facing vertical side of the paper supply. The low-reserve indicator mechanism includes an indicator mounted for movement between a retracted position and an indicating position for establishing a low-reserve indication detectable from outside of the dispenser house. The indicator mechanism also includes a release mechanism adapted to be spring-biased into contact with the vertical side of the paper supply. The release mechanism is released for movement in response to becoming unsupported by a diminishing height of the vertical side of the paper supply to cause the indicator to move to its indicating position.