Lar maintains the homeostasis of the hematopoietic organ in Drosophila by regulating insulin signaling in the niche.

Stem cell compartments in metazoa get regulated by systemic factors as well as local stem cell niche-derived factors. However, the mechanisms by which systemic signals integrate with local factors in maintaining tissue homeostasis remain unclear. Employing the Drosophila lymph gland, which harbors differentiated blood cells, and stem-like progenitor cells and their niche, we demonstrate how a systemic signal interacts and harmonizes with local factor/s to achieve cell type-specific tissue homeostasis. Our genetic analyses uncovered a novel function of Lar, a receptor protein tyrosine phosphatase. Niche-specific loss of Lar leads to upregulated insulin signaling, causing increased niche cell proliferation and ectopic progenitor differentiation. Insulin signaling assayed by PI3K activation is downregulated after the second instar larval stage, a time point that coincides with the appearance of Lar in the hematopoietic niche. We further demonstrate that Lar physically associates with InR and serves as a negative regulator for insulin signaling in the Drosophila larval hematopoietic niche. Whether Lar serves as a localized invariable negative regulator of systemic signals such as insulin in other stem cell niches remains to be explored.