Tight regulation of stem cell proliferation is fundamental to tissue homeostasis, aging and tumor suppression. Although stem cells are characterized by their high potential to proliferate throughout the life of the organism, the mechanisms that regulate the cell cycle of stem cells remain poorly understood. Here, we show that the Cdc25 homolog String (Stg) is a crucial regulator of germline stem cells (GSCs) and cyst stem cells (CySCs) in Drosophila testis. Through knockdown and overexpression experiments, we show that Stg is required for stem cell maintenance and that a decline in its expression during aging is a critical determinant of age-associated decline in stem cell function. Furthermore, we show that restoration of Stg expression reverses the age-associated decline in stem cell function but leads to late-onset tumors. We propose that Stg/Cdc25 is a crucial regulator of stem cell function during tissue homeostasis and aging.