The Hippo signaling pathway acts upon the Yorkie transcriptional activator to control tissue growth in Drosophila. Activated Yorkie drives growth by stimulating cell proliferation and inhibiting apoptosis, but how it achieves this is not understood. Yorkie is known to activate Cyclin E (CycE) and the apoptosis inhibitor DIAP1. However, overexpression of these targets is not sufficient to cause tissue overgrowth. Here we show that Yorkie also activates expression of the bantam microRNA, a known regulator of both proliferation and apoptosis. bantam overexpression mimics Yorkie activation while loss of bantam function slows the rate of cell proliferation. bantam is necessary for Yorkie-induced overproliferation and bantam overexpression is sufficient to rescue survival and proliferation of yorkie mutant cells. Finally, we show that bantam levels are regulated during both developmentally programmed proliferation arrest and apoptosis. In summary, the results show that the Hippo pathway regulates expression of bantam to control tissue growth in Drosophila.