During animal development, organ size is determined primarily by the amount of cell proliferation, which must be tightly regulated to ensure the generation of properly proportioned organs. However, little is known about the molecular pathways that direct cells to stop proliferating when an organ has attained its proper size. We have identified mutations in a novel gene, shar-pei, that is required for proper termination of cell proliferation during Drosophila imaginal disc development. Clones of shar-pei mutant cells in imaginal discs produce enlarged tissues containing more cells of normal size. We show that this phenotype is the result of both increased cell proliferation and reduced apoptosis. Hence,shar-pei restricts cell proliferation and promotes apoptosis. By contrast, shar-pei is not required for cell differentiation and pattern formation of adult tissue. Shar-pei is also not required for cell cycle exit during terminal differentiation, indicating that the mechanisms directing cell proliferation arrest during organ growth are distinct from those directing cell cycle exit during terminal differentiation. shar-pei encodes a WW-domain-containing protein that has homologs in worms, mice and humans, suggesting that mechanisms of organ growth control are evolutionarily conserved.