Drosophila POU/Oct transcription factors are required for many developmental processes, but their putative regulation of adult stem cell activity has not been investigated. Here, we show that Nubbin (Nub)/Pdm1, homologous to mammalian OCT1/POU2F1 and related to OCT4/POU5F1, is expressed in gut epithelium progenitor cells. We demonstrate that the nub-encoded protein isoforms, Nub-PB and Nub-PD, play opposite roles in the regulation of intestinal stem cell (ISC) maintenance and differentiation. Depletion of Nub-PB in progenitor cells increased ISC proliferation by derepression of escargot expression. Conversely, loss of Nub-PD reduced ISC proliferation, suggesting that this isoform is necessary for ISC maintenance, analogous to mammalian OCT4/POU5F1 functions. Furthermore, Nub-PB is required in enteroblasts to promote differentiation, and it acts as a tumor suppressor of Notch RNAi-driven hyperplasia. We suggest that a dynamic and well-tuned expression of Nub isoforms in progenitor cells is required for maintaining gut epithelium homeostasis.