Stem cell niches are specialized signalling microenvironments that allow maintenance of the stem cells. According to the traditional model of the stem cell niche, the niche signalling input is integrated by a cell towards a binary decision between stemness and differentiation. I have studied the regulation of somatic cyst stem cell (CyCS) proliferation in the testicular stem cell niche of Drosophila melanogaster by performing the DamID screen for targets of the transcriptional regulator Zfh1, a shared target of Jak/STAT and Hedgehog niche signalling. I have found that Zfh1 binds to the regulatory regions of kibra and salvador, tumour suppressors of the Hippo/Yorkie pathway, and downregulates them, restricting Yorkie activity to the Zfh1 positive CySCs. Clonal inactivation of the Hippo pathway is sufficient for CySC proliferation, but does not affect their differentiation ability. I therefore proposed a different stem cell niche model, whereby the niche signalling directly “micromanage” stem cell behavior, not involving the cell fate decision making.