The mammalian growth factor TGFbeta negatively regulates cell proliferation in various systems. Here we provide evidence that another TGFbeta superfamily member, Drosophila Decapentaplegic (Dpp), stimulates cell proliferation. In the developing wing blade, somatic clones lacking the Dpp receptors Punt or Thick veins (Tkv), or lacking Schnurri, a transcription factor involved in Dpp signal interpretation, fail to grow when induced early in larval development. Furthermore the spatial requirement for these signaling components indicates that Dpp has to travel several cell diameters from its source in order to reach all cells that require its signal. The requirement for Tkv also depends on the distance of cells from the source of the Dpp signal. We propose that Dpp can act at a distance to positively control cell proliferation.