In accordance with FUBP1’s function as a MYC transcriptional activator, this single stranded DNA/RNA binding protein is upregulated in many cancers (e.g. breast, liver, bladder, prostate, kidney and lung). Moreover, our recent Drosophila studies demonstrated the FUBP1 ortholog (Psi) interacts with the Mediator (MED) complex to activate Myc transcription and promote cell and tissue growth in the wing epithelium. In contrast to these oncogenic functions, FUBP1 loss-of-function ranks as the 4th highest driver mutation in oligodendroglioma brain tumours and hyperproliferation has been observed in the embryonic brain of Fubp1 knockout mice. Our observations using Drosophila brain models provide a potential rationale for FUBP1’s tumour suppressor behaviour. Not only does Psi/FUBP1 knockdown in neural stem cells drive lineage expansion, but depletion specifically in the surrounding microenvironment non-autonomously drives stem cell proliferation. To elucidate Psi/FUBP1’s function, in both the neural stem cells and the cortical glial niche, we used Targeted DamID (TaDa) to identify lineage-specific, direct, genome-wide targets. In contrast to wing epithelial tissues, TaDa did not detect Myc as a direct Psi/FUBP1 target in either brain lineage. Direct Psi/FUBP1 targets in the neural stem cell lineage included stem cell fate determinants (e.g. Pros, Wor, Dpn, Erm). Cortical glial niche targets included secreted proteins (e.g. EGF, FGF, BMP/TGF ligands), which we predict signal from the cortical glia to control fate of neighbouring neural stem cells. Moreover, Psi/FUBP1 transcriptional networks in the brain are highly conserved, with 82% of the human orthologues of the Drosophila Psi/FUBP1 targets dysregulated in low grade glioma (TCGA). Together, our data demonstrate Psi normally acts intrinsically in stem cells and extrinsically in the glial niche to prevent neural stem cell expansion. We therefore hypothesise that FUBP1 loss-of-function in glioma drives stem cell expansion and tumourigenesis both directly by driving stemness and indirectly by disrupting the stem cell microenvironment.