Mammalian nucleostemin (NS) is a nucleolar guanosine triphosphate-binding protein implicated in cell cycle progression, stem cell proliferation, and ribosome assembly. Drosophila melanogaster contains a four-member nucleostemin family (NS1-4). NS1 is the closest orthologue to human NS; it shares 33% identity and 67% similarity with human NS. We show that NS1 has intrinsic GTPase and ATPase activity and that it is present within nucleoli of most larval and adult cells. Endogenous NS1 and lightly expressed green fluorescent protein (GFP)-NS1 enrich within the nucleolar granular regions as expected, whereas overexpressed GFP-NS1 localized throughout the nucleolus and nucleoplasm, and to several transcriptionally active interbands of polytene chromosomes. Severe overexpression correlated with the appearance of melanotic tumors and larval/pupal lethality. Depletion of 60% of NS1 transcripts also lead to larval and pupal lethality. NS1 protein depletion>95 correlated with the loss of imaginal island (precursor) cells in the larval midgut and to an apparent block in the nucleolar release of large ribosomal subunits in terminally differentiated larval midgut polyploid cells. Ultrastructural examination of larval Malpighian tubule cells depleted for NS1 showed a loss of cytoplasmic ribosomes and a concomitant appearance of cytoplasmic preautophagosomes and lysosomes. We interpret the appearance of these structures as indicators of cell stress response.