Tumor Susceptibility Gene-101 (TSG101) promotes the endocytic degradation of transmembrane proteins and is implicated as a mutational target in cancer, yet the effect of TSG101 loss on cell proliferation in vertebrates is uncertain. By contrast, Drosophila epithelial tissues lacking the TSG101 ortholog erupted (ept) develop as enlarged undifferentiated tumors, indicating that the gene can have anti-growth properties in a simple metazoan. A full understanding of pathways deregulated by loss of Drosophila ept will aid in understanding potential links between mammalian TSG101 and growth control.We have taken a genetic approach to the identification of pathways required for excess growth of Drosophila eye-antennal imaginal discs lacking ept. We find that this phenotype is very sensitive to the genetic dose of stat92E, the transcriptional effector of the Jak-Stat signaling pathway, and that this pathway undergoes strong activation in ept mutant cells. Genetic evidence indicates that stat92E contributes to cell cycle deregulation and excess cell size phenotypes that are observed among ept mutant cells. In addition, autonomous Stat92E hyper-activation is associated with altered tissue architecture in ept tumors and an effect on expression of the apical polarity determinant crumbs.These findings identify ept as a cell-autonomous inhibitor of the Jak-Stat pathway and suggest that excess Jak-Stat signaling makes a significant contribution to proliferative and tissue architectural phenotypes that occur in ept mutant tissues.