In the Drosophila testis, germline stem cells (GSCs) and somatic cyst stem cells (CySCs) are arranged around a group of postmitotic somatic cells, termed the hub, which produce a variety of growth factors contributing to the niche microenvironment that regulates both stem cell pools. Here we show that CySC but not GSC maintenance requires Hedgehog (Hh) signalling in addition to Jak/Stat pathway activation. CySC clones unable to transduce the Hh signal are lost by differentiation, whereas pathway overactivation leads to an increase in proliferation. However, unlike cells ectopically overexpressing Jak/Stat targets, the additional cells generated by excessive Hh signalling remain confined to the testis tip and retain the ability to differentiate. Interestingly, Hh signalling also controls somatic cell populations in the fly ovary and the mammalian testis. Our observations might therefore point towards a higher degree of organisational homology between the somatic components of gonads across the sexes and phyla than previously appreciated.