The DRE/DREF transcriptional regulatory system has been demonstrated to activate a wide variety of genes with various functions. In Drosophila, the Hippo pathway is known to suppress cell proliferation by inducing apoptosis and cell cycle arrest through inactivation of Yorkie, a transcription co-activator. In the present study, we found that half dose reduction of the hippo (hpo) gene induces ectopic DNA synthesis in eye discs that is suppressed by overexpression of DREF. Half reduction of the hpo gene dose reduced apoptosis in DREF-overexpressing flies. Consistent with these observations, overexpression of DREF increased the levels of hpo and phosphorylated Yorkie in eye discs. Interestingly, the diap1-lacZ reporter was seen to be significantly decreased by overexpression of DREF. Luciferase reporter assays in cultured S2 cells revealed that one of two DREs identified in the hpo gene promoter region was responsible for promoter activity in S2 cells. Furthermore, endogenous hpo mRNA was reduced in DREF knockdown S2 cells, and chromatin immnunoprecipitation assays with anti-DREF antibodies proved that DREF binds specifically to the hpo gene promoter region containing DREs in vivo. Together, these results indicate that the DRE/DREF pathway is required for transcriptional activation of the hpo gene to positively control Hippo pathways.