Cellular growth and proliferation are coordinated during organogenesis. Misregulation of these processes leads to pathological conditions such as cancer. Tuberous sclerosis (TSC) is a benign tumour syndrome caused by mutations in either TSC1 or TSC2 tumour suppressor genes. Studies in Drosophila and other organisms have identified TSC signalling as a conserved pathway for growth control. Activation of the TSC pathway is mediated by Rheb (Ras homologue enriched in brain), a Ras superfamily GTPase. Rheb is a direct target of TSC2 and is negatively regulated by its GTPase-activating protein activity. However, molecules required for positive regulation of Rheb have not been identified. Here we show that a conserved protein, translationally controlled tumour protein (TCTP), is an essential new component of the TSC-Rheb pathway. Reducing Drosophila TCTP (dTCTP) levels reduces cell size, cell number and organ size, which mimics Drosophila Rheb (dRheb) mutant phenotypes. dTCTP is genetically epistatic to Tsc1 and dRheb, but acts upstream of dS6k, a downstream target of dRheb. dTCTP directly associates with dRheb and displays guanine nucleotide exchange activity with it in vivo and in vitro. Human TCTP (hTCTP) shows similar biochemical properties compared to dTCTP and can rescue dTCTP mutant phenotypes, suggesting that the function of TCTP in the TSC pathway is evolutionarily conserved. Our studies identify TCTP as a direct regulator of Rheb and a potential therapeutic target for TSC disease.