The mucous barrier of our digestive tract is the first line of defense against pathogens and damage. Disruptions in this barrier are associated with diseases such as Crohn's disease, colitis, and colon cancer, but mechanistic insights into these processes and diseases are limited. We have previously shown that loss of a conserved O-glycosyltransferase (PGANT4) in Drosophila results in aberrant secretion of components of the peritrophic/mucous membrane in the larval digestive tract. Here, we show that loss of PGANT4 disrupts the mucosal barrier, resulting in epithelial expression of the IL-6-like cytokine Upd3, leading to activation of JAK/STAT signaling, differentiation of cells that form the progenitor cell niche, and abnormal proliferation of progenitor cells. This niche disruption could be recapitulated by overexpressing upd3 and rescued by deleting upd3, highlighting a crucial role for this cytokine. Moreover, niche integrity and cell proliferation in pgant4-deficient animals could be rescued by overexpression of the conserved cargo receptor Tango1 and partially rescued by supplementation with exogenous mucins or treatment with antibiotics. Our findings help elucidate the paracrine signaling events activated by a compromised mucosal barrier and provide a novel in vivo screening platform for mucin mimetics and other strategies to treat diseases of the oral mucosa and digestive tract.