Signaling pathways and epigenetic mechanisms have both been shown to play essential roles in regulating stem cell activity. While the role of either mechanism in this regulation is well established in multiple stem cell lineages, how the two mechanisms interact to regulate stem cell activity is not as well understood. Here we report that in the Drosophila testis, an H3K4me3-specific histone demethylase encoded by little imaginal discs (lid) maintains germline stem cell (GSC) mitotic index and prevents GSC premature differentiation. Lid is required in germ cells for proper expression of the Stat92E transcription factor, the downstream effector of the Janus kinase signal transducer and activator of transcription (JAK-STAT) signaling pathway. Our findings support a germ cell autonomous role for the JAK-STAT pathway in maintaining GSCs and place Lid as an upstream regulator of this pathway. Our study provides new insights into the biological functions of a histone demethylase in vivo and sheds light on the interaction between epigenetic mechanisms and signaling pathways in regulating stem cell activities.