Here we report the development of an in vivo system to study the interaction of stem cells with drugs using a tumor model in the adult Drosophila intestine. Strikingly, we find that some Food and Drug Administration-approved chemotherapeutics that can inhibit the growth of Drosophila tumor stem cells can paradoxically promote the hyperproliferation of their wild-type counterparts. These results reveal an unanticipated side effect on stem cells that may contribute to tumor recurrence. We propose that the same side effect may occur in humans based on our finding that it is driven in Drosophila by the evolutionarily conserved Janus kinase-signal transducers and activators of transcription (JAK-STAT) pathway. An immediate implication of our findings is that supplementing traditional chemotherapeutics with anti-inflammatories may reduce tumor recurrence.