Stem cells can be controlled by their local microenvironment, known as the stem cell niche. The Drosophila testes contain a morphologically distinct niche called the hub, composed of a cluster of between 8 and 20 cells known as hub cells, which contact and regulate germline stem cells (GSCs) and somatic cyst stem cells (CySCs). Both hub cells and CySCs originate from somatic gonadal precursor cells during embryogenesis, but whereas hub cells, once specified, cease all mitotic activity, CySCs remain mitotic into adulthood <up>1, 2</up>. Cyst cells, derived from the CySCs, first encapsulate the germline and then, using occluding junctions, form an isolating permeability barrier 3. This barrier promotes germline differentiation by excluding niche-derived stem cell maintenance factors. Here, we show that the somatic permeability barrier is also required to regulate stem cell niche homeostasis. Loss of occluding junction components in the somatic cells results in hub overgrowth. Enlarged hubs are active and recruit more GSCs and CySCs to the niche. Surprisingly, hub growth results from depletion of occluding junction components in cyst cells, not from depletion in the hub cells themselves. Moreover, hub growth is caused by incorporation of cells that previously expressed markers for cyst cells and not by hub cell proliferation. Importantly, depletion of occluding junctions disrupts Notch and mitogen-activated protein kinase (MAPK) signaling, and hub overgrowth defects are partially rescued by modulation of either signaling pathway. Overall, these data show that occluding junctions shape the signaling environment between the soma and the germline in order to maintain niche homeostasis.