In Drosophila, the replacement of spent enterocytes (ECs) relies on division of intestinal stem cells (ISCs) and differentiation of their progeny, the enteroblasts (EBs). Recent studies have revealed a role for JAK/STAT signaling in the modulation of the rate of ISC division in response to environmental challenge. Here, we demonstrate the critical role of the UPD3 cytokine in the JAK/STAT-dependent response to enteric infection. We show that upd3 expression is activated in ECs and in EBs that massively differentiate in response to challenge. We show that the UPD3 cytokine, which is secreted basally and accumulates at the basement membrane, is required for stimulation of JAK/STAT signaling in EBs and visceral muscles (VMs). We further show that stimulation of ISC division requires active JAK/STAT signaling in EBs and VMs, but apparently not in ISCs. Our results suggest that EBs and VMs modulate the rate of the EGFR-dependent ISC division through upd3-dependent production of the EGF ligands Spitz and Vein, respectively. This study therefore supports the notion that the production of the UPD3 cytokine in stem cell progeny (ECs and EBs) stimulates intestinal stem cell division through modulation of JAK/STAT signaling in the stem cell microenvironment (EBs and VMs).