A paper towel dispenser includes a housing with an inner chamber configured to support a paper supply and a dispensing aperture for dispensing paper from the paper supply. The paper supply includes a side that is formed by superimposed edge portions of paper from the paper supply. An indicator mechanism is affixed to the housing within the inner chamber and is disposed adjacent the paper supply. The indicator mechanism includes an indicator operably connected to a release mechanism. The indicator is movable between a retracted position and an indicating position. The release mechanism is pivotally biased away from the housing and is releasable in response to the paper supply being reduced below a predetermined amount. Upon release of the release mechanism, the release mechanism causes the indicator to move to the indicating position.