Constant cell renewal is required to maintain healthy organs during adult homeostasis. The highly conserved Hippo signaling pathway is essential for the regulation of basic cell behaviors that underlie tissue renewal, including cell proliferation, cell differentiation, and cell death. The Hippo protein has been implicated in several human cancers, and its inhibition in mouse and Drosophila promotes the formation of overgrowths. Nonetheless, its biological function remains poorly understood. To address this issue, we studied the role of Hippo in planarians, flatworms that continuously alter their size depending on nutrient availability, and therefore have a high rate of cellular turnover. This ability is sustained by an abundant population of adult totipotent stem cells. We show that hippo inhibition in planarians decreases apoptotic cell death, impairs cell progression through the cell cycle, and causes instability of the differentiated cell fate. These events ultimately lead to the formation of overgrowths consisting of undifferentiated cells. We propose that the main role of Hippo in planarians is not to promote proliferation but to control the cell cycle and maintain a stable differentiated cell fate.