Hippo (Hpo) signaling plays a critical role in restricting tissue growth and organ size in both invertebrate and vertebrate animals. However, how the Hpo kinase is regulated during development has not been clearly understood. Using a Bimolecular Fluorescence Complementation assay, we have investigated the functional significance of Hpo homo-dimer formation and subcellular localization in living cells. We found that Hpo dimerization and membrane association are critical for its activation in growth inhibition. As dimerization facilitates Hpo to access its binding partner, Hpo kinases in the homo-dimer trans-phosphorylate each other to increase their enzymatic activity. Moreover, loss- and gain-of-function studies indicate that upstream regulators, Expanded, Merlin and Kibra, play a critical role in promoting Hpo dimerization as well as association to the cortical F-actin beneath the plasma membrane. Enforced Hpo localization to the plasma membrane increases Hpo dimerization and activity. Therefore, homo-dimerization and plasma membrane association are two important mechanisms for Hpo activation in growth control during animal development.