The transcription factor FoxO has been shown to block proliferation and progression in mTORC1-driven tumorigenesis but the picture of the relevant FoxO target genes remains incomplete. Here, we employed RNA-seq profiling on single clones isolated using laser capture microdissection from Drosophila larval eye imaginal discs to identify FoxO targets that restrict the proliferation of Tsc1-deficient cells under nutrient restriction (NR). Transcriptomics analysis revealed downregulation of endoplasmic reticulum-associated protein degradation pathway components upon foxo knockdown. Induction of ER stress pharmacologically or by suppression of other ER stress response pathway components led to an enhanced overgrowth of Tsc1 knockdown tissue. Increase of ER stress in Tsc1 loss-of-function cells upon foxo knockdown was also confirmed by elevated expression levels of known ER stress markers. These results highlight the role of FoxO in limiting ER stress to regulate Tsc1 mutant overgrowth.