Disrupting mechanisms that control cell proliferation, cell size and apoptosis can cause changes in animal and tissue size and contribute to diseases such as cancer. The LATS family of serine/threonine kinases control tissue size by regulating cell proliferation and function as tumor suppressor genes in both Drosophila and mammals. In order to understand the role of lats in size regulation, we performed a genetic modifier screen in Drosophila to identify components of the lats signaling pathway. Mutations in the Drosophila homolog of C-terminal Src kinase (dcsk) were identified as dominant modifiers of both lats gain-of-function and loss-of-function phenotypes. Homozygous dcsk mutants have enlarged tissue phenotypes similar to lats and FACS and immunohistochemistry analysis of these tissues revealed that dcsk also regulates cell proliferation during development. Animals having mutations in both dcsk and lats display cell overproliferation phenotypes more severe than either mutant alone, demonstrating these genes function together in vivo to regulate cell numbers. Furthermore, homozygous dcsk phenotypes can be partially suppressed by overexpression of lats, indicating that lats is a downstream mediator of dcsk function in vivo. Finally, we show that dCSK phosphorylates LATS in vitro at a conserved C-terminal tyrosine residue, which is critical for normal LATS function in vivo. Taken together, these results demonstrate a role for dCSK in regulating cell numbers during development by inhibiting cell proliferation and suggest that lats is one of the mediators of the dcsk phenotype.