Tissue growth is achieved through coordinated cellular growth, cell division and apoptosis. Hippo signaling is critical for monitoring tissue growth during animal development. Loss of Hippo signaling leads to tissue overgrowth due to continuous cell proliferation and block of apoptosis. As cells lacking Hippo signaling are similar in size compared to normal cells, cellular growth must be properly maintained in Hippo signaling-deficient cells. However, it is not clear how Hippo signaling might regulate cellular growth. Here we show that loss of Hippo signaling increased Akt (also called Protein Kinase B, PKB) expression and activity, whereas activation of Hippo signaling reduced Akt expression in developing tissues in Drosophila. While yorkie (yki) is sufficient to increase Akt expression, Akt up-regulation caused by the loss of Hippo signaling is strongly dependent on yki, indicating that Hippo signaling negatively regulates Akt expression through Yki inhibition. Consistently, genetic analysis revealed that Akt plays a critical role in facilitating growth of Hippo signaling-defective tissues. Thus, Hippo signaling not only blocks cell division and promotes apoptosis, but also regulates cellular growth by inhibiting the Akt pathway activity.