Apoptosis operates to eliminate damaged or potentially dangerous cells. This loss is often compensated by extra proliferation of neighboring cells. Studies in Drosophila imaginal discs suggest that the signal for the additional growth emanates from the dying cells. In particular, it was suggested that the initiator caspase Dronc mediates compensatory proliferation (CP) through Dp53 in wing discs. However, the exact mechanism that governs this CP remained poorly understood. We have previously shown that elimination of misspecified cells due to reduced Dpp signaling is achieved by the interaction of the co-repressor NAB with the transcriptional repressor Brk, which in turn induces Jun N-terminal kinase-dependent apoptosis. Here, we performed a systematic in vivo loss- and gain-of-function analysis to study NAB-induced death and CP. Our findings indicate that the NAB primary signal activates JNK, which in turn transmits two independent signals. One triggers apoptosis through the pro-apoptotic proteins Reaper and Hid, which in turn promote activation of caspases by the apoptosome components Ark and Dronc. The other signal induces CP in a manner that is independent of the death signal, Dronc, or Dp53. Once induced, the apoptotic pathway further activates a CP response. Our data suggest that JNK is the candidate factor that differentiates between apoptosis that involves CP and apoptosis that does not.