The Drosophila adult midgut contains intestinal stem cells that support homeostasis and repair. We show here that the leucine zipper protein Bunched and the adaptor protein Madm are novel regulators of intestinal stem cells. MARCM mutant clonal analysis and cell type specific RNAi revealed that Bunched and Madm were required within intestinal stem cells for proliferation. Transgenic expression of a tagged Bunched showed a cytoplasmic localization in midgut precursors, and the addition of a nuclear localization signal to Bunched reduced its function to cooperate with Madm to increase intestinal stem cell proliferation. Furthermore, the elevated cell growth and 4EBP phosphorylation phenotypes induced by loss of Tuberous Sclerosis Complex or overexpression of Rheb were suppressed by the loss of Bunched or Madm. Therefore, while the mammalian homolog of Bunched, TSC-22, is able to regulate transcription and suppress cancer cell proliferation, our data suggest the model that Bunched and Madm functionally interact with the TOR pathway in the cytoplasm to regulate the growth and subsequent division of intestinal stem cells.