The work presented in this thesis provides insights into the Drosophila smooth septate junction complex Ssk-Mesh that regulates ISC proliferation and tissue homeostasis in addition to the well-known barrier function in the epithelial integrity. With CRISPR-generated tag knockin alleles of Ssk and Mesh, I characterized the intracellular expression pattern of Ssk and Mesh. Ssk and Mesh had low but detectable expression in punctate format in the cytoplasm of enteroblasts (EBs). The protein expression profile of Ssk and Mesh correlated with their ability to regulate the ISC proliferation even though the septate junctions in EBs had not fully formed. Along with further differentiation into mature enterocytes (ECs), Ssk and Mesh gradually localized to the epithelial apical domain, where they coordinated with other junction proteins, such as Tsp2A and Coracle, to form the septate junction. RNAi-conducted genetic assays and mutant clonal analyses by knockout mutant alleles of Ssk and mesh further revealed that Ssk and Mesh restricted the activity of the transcription coactivator Yki, which governs the production of the cytokine Upd3 along the EB-EC differentiation lineage in adult midgut. Loss of Ssk or Mesh activated Yki to elevate the upd3 expression and thereby to induce the robust ISC proliferation non-autonomously. Although the total number of EBs in midgut is much fewer than that of ECs, surprisingly, knockdown Ssk or mesh in EBs resulted in a comparable upd3 upregulation and ISC proliferation as knockdown their expression in ECs. Leaky midgut caused by knockdown of Ssk or mesh in ECs activated the stress-responding mechanisms to repair the damaged intestinal epithelium, and was eventually associated with death of animals. The reduction of Ssk and Mesh in EBs displayed much milder gut leakage and lower lethality further confirmed that Ssk and Mesh in the two distinct cell types had their own roles in governing ISC proliferation.