Hypusination is a unique posttranslational modification by which lysine is transformed into the atypical amino acid hypusine. eIF5A (eukaryotic initiation factor 5A) is the only known protein to contain hypusine. In this study, we describe the identification and characterization of nero, the Drosophila melanogaster deoxyhypusine hydroxylase (DOHH) homologue. nero mutations affect cell and organ size, bromodeoxyuridine incorporation, and autophagy. Knockdown of the hypusination target eIF5A via RNA interference causes phenotypes similar to nero mutations. However, loss of nero appears to cause milder phenotypes than loss of eIF5A. This is partially explained through a potential compensatory mechanism by which nero mutant cells up-regulate eIF5A levels. The failure of eIF5A up-regulation to rescue nero mutant phenotypes suggests that hypusination is required for eIF5A function. Furthermore, expression of enzymatically impaired forms of DOHH fails to rescue nero clones, indicating that hypusination activity is important for nero function. Our data also indicate that nero and eIF5A are required for cell growth and affect autophagy and protein synthesis.