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Regenerative processes are critical to maintain tissue homeostasis in high-turnover tissues. At the same time, proliferation of stem and progenitor cells has to be carefully controlled to prevent hyper-proliferative diseases. Mechanisms that ensure this balance, thus promoting proliferative homeostasis, are expected to be critical for longevity in metazoans. The intestinal epithelium of Drosophila provides an accessible model in which to test this prediction. In aging flies, the intestinal epithelium degenerates due to over-proliferation of intestinal stem cells (ISCs) and mis-differentiation of ISC daughter cells, resulting in intestinal dysplasia. Here we show that conditions that impair tissue renewal lead to lifespan shortening, whereas genetic manipulations that improve proliferative homeostasis extend lifespan. These include reduced Insulin/IGF or Jun-N-terminal Kinase (JNK) signaling activities, as well as over-expression of stress-protective genes in somatic stem cell lineages. Interestingly, proliferative activity in aging intestinal epithelia correlates with longevity over a range of genotypes, with maximal lifespan when intestinal proliferation is reduced but not completely inhibited. Our results highlight the importance of the balance between regenerative processes and strategies to prevent hyperproliferative disorders and demonstrate that promoting proliferative homeostasis in aging metazoans is a viable strategy to extend lifespan., Author Summary Somatic stem cells are critical for regeneration of many tissues, thus ensuring long-term maintenance of tissue function. Proliferation of stem and progenitor cells has to be limited, however, to prevent hyperproliferative diseases and cancer in aging animals. This conflict between the need for stem cell proliferative potential and cancer prevention compromises regeneration in many high-turnover tissues of aging animals, including humans. It remains to be established whether and how proliferative homeostasis can be optimized to positively influence lifespan. Our work addresses this question using fruitflies as a model, taking advantage of the recent discovery of regenerative processes in adult flies. In old flies, intestinal stem cells (ISCs) hyperproliferate, causing an accumulation of mis-differentiated daughter cells (a phenotype termed intestinal dysplasia). We show that the balance between regeneration and dysplasia in this tissue significantly influences lifespan. When ISC proliferation rates are reduced, but not completely inhibited, dysplasia is limited and lifespan is increased. This can be achieved by moderately reducing insulin and stress signaling activities, as well as by expressing protective proteins in somatic stem cell lineages. Our results show that optimizing proliferative homeostasis (i.e. limiting dysplasia, but allowing sufficient regeneration) in high-turnover tissues is an efficient strategy to extend lifespan.