Eukaryotic pseudouridine synthases direct RNA pseudouridylation and bind H/ACA small nucleolar RNA (snoRNAs), which, in turn, may act as precursors of microRNA-like molecules. In humans, loss of pseudouridine synthase activity causes dyskeratosis congenita (DC), a complex systemic disorder characterized by cancer susceptibility, failures in ribosome biogenesis and telomere stability, and defects in stem cell formation. Considering the significant interest in deciphering the various molecular consequences of pseudouridine synthase failure, we performed a loss of function analysis of minifly (mfl), the pseudouridine synthase gene of Drosophila, in the wing disc, an advantageous model system for studies of cell growth and differentiation. In this organ, depletion of the mfl-encoded pseudouridine synthase causes a severe reduction in size by decreasing both the number and the size of wing cells. Reduction of cell number was mainly attributable to cell death rather than reduced proliferation, establishing that apoptosis plays a key role in the development of the loss of function mutant phenotype. Depletion of Mfl also causes a proliferative disadvantage in mosaic tissues that leads to the elimination of mutant cells by cell competition. Intriguingly, mfl silencing also triggered unexpected effects on wing patterning and cell differentiation, including deviations from normal lineage boundaries, mingling of cells of different compartments, and defects in the formation of the wing margin that closely mimic the phenotype of reduced Notch activity. These results suggest that a component of the pseudouridine synthase loss of function phenotype is caused by defects in Notch signalling.