Tissue growth has to be carefully controlled to generate well-functioning organs. MicroRNAs are small non-coding RNAs that modulate the activity of target genes and play a pivotal role in animal development. Understanding the functions of microRNAs in development requires the identification of their target genes. Here, we find that , a conserved microRNA in the family, controls tissue growth and homeostasis in the wing imaginal disc. Upregulation of causes the repression of , the effector of the Hippo pathway in, and reduces tissue size. Remarkably, co-expression of and causes the formation of neoplastic tumors. We show that upregulation of represses the growth inhibitor, and depletion of cooperates with in the formation of neoplastic tumors. Hence, modulates a positive growth regulator,, and a negative growth regulator, Deregulation of this network can result in the loss of tissue homeostasis and the formation of tumors.