Drosophila tumor suppressor genes have revealed molecular pathways that control tissue growth, but mechanisms that regulate mitogenic signaling are far from understood. Here we report that the Drosophila TSG tumorous imaginal discs (tid), whose phenotypes were previously attributed to mutations in a DnaJ-like chaperone, are in fact driven by the loss of the N-linked glycosylation pathway component ALG3. tid/alg3 imaginal discs display tissue growth and architecture defects that share characteristics of both neoplastic and hyperplastic mutants. Tumorous growth is driven by inhibited Hippo signaling, induced by excess Jun N-terminal kinase (JNK) activity. We show that ectopic JNK activation is caused by aberrant glycosylation of a single protein, the fly tumor necrosis factor (TNF) receptor homolog, which results in increased binding to the continually circulating TNF. Our results suggest that N-linked glycosylation sets the threshold of TNF receptor signaling by modifying ligand-receptor interactions and that cells may alter this modification to respond appropriately to physiological cues.