Niches are traditionally characterized as signalling microenvironments that allow stem cells to maintain their fate. This definition implicitly assumes the integration of multiple niche signals towards a binary decision between stemness and differentiation. However, observations in multiple systems have demonstrated that stem cell properties such as proliferation and differentiation can be uncoupled at the level of niche signalling input, which is incompatible with this traditional view. We have studied the role of the transcriptional regulator Zfh1, a shared target of the Hedgehog and Jak/Stat niche signalling pathways in the somatic cyst stem cells of the Drosophila testis. We demonstrate that Zfh1 binds and downregulates salvador and kibra, two tumour suppressor genes of the Hippo/Wts/Yki pathway. Yki activation is thereby restricted to the Zfh1 positive stem cells, which are hence the only somatic cell able to proliferate. Our observations therefore trace a direct connection from stem cell proliferation back to niche signal input, and provide a mechanistic example for the "micromanagement" of an individual aspect of stem cell behaviour by the niche.