The krüppel-like factors (KLFs) are a family of transcription factor proteins that regulate a wide range of biological processes. In an RNAi-based screening experiment, we identified dendritic arbor reduction 1 (Dar1), which is a KLF member in Drosophila, that inhibited the proliferation of intestinal stem cells (ISCs). We found suppression of Dar1-activated ISC proliferation; as a consequence, the ISCs and the young differentiated cells were increased. On the other hand, overexpression (OE) of Dar1 inhibited ISC division and blocked the formation of ISC lineages. In order to explore the molecular mechanism of the Dar1 functions, we compared the gene expression profiles of the Dar1 knockdown and Dar1 OE midguts, using the deep RNA sequencing (RNA-Seq) technique. This experiment revealed that Dar1 negatively regulated the expression of several critical cell cycle genes. We further provide evidence that Dar1 has a function upstream of the JAK/STAT signaling pathway, suggesting Dar1 can regulate ISC proliferation through different mechanisms. Consistent with these findings, we discovered that Dar1 was downregulated in the wounded midguts, allowing increased ISC proliferation to promote intestinal repair. Our data suggest that Dar1 is a functional homolog of the mammalian KLF4.