The Hippo pathway plays a key role in regulating cell turnover in adult tissues, and abnormalities in this pathway are consistently associated with human cancers. Hippo was initially implicated in the control of cell proliferation and death, and its inhibition is linked to the expansion of stem cells and progenitors, leading to larger organ size and tumor formation. To understand the mechanism by which Hippo directs cell renewal and promotes stemness, we studied its function in planarians. These stem cell-based organisms are ideal models for the analysis of the complex cellular events underlying tissue renewal in the whole organism. hippo RNA interference (RNAi) in planarians decreased apoptotic cell death, induced cell cycle arrest, and could promote the dedifferentiation of postmitotic cells. hippo RNAi resulted in extensive undifferentiated areas and overgrowths, with no effect on body size or cell number. We propose an essential role for hippo in controlling cell cycle, restricting cell plasticity, and thereby preventing tumoral transformation.