Many developing tissues display regenerative capability that allows them to compensate cell loss and preserve tissue homeostasis. Because of their remarkable regenerative capability, Drosophila wing discs are extensively used for the study of regenerative phenomena. We thus used the developing wing to investigate the role played in tissue homeostasis by the evolutionarily conserved eukaryotic H/ACA small nucleolar ribonucleoprotein pseudouridine synthase. Here we show that localized depletion of this enzyme can act as an endogenous stimulus capable of triggering apoptosis-induced proliferation, and that context-dependent effects are elicited in different sub-populations of the silenced cells. In fact, some cells undergo apoptosis, whereas those surrounding the apoptotic foci, although identically depleted, overproliferate. This overproliferation correlates with ectopic induction of the Wg and JAK-STAT (Janus kinase-signal transducer and activator of transcription) mitogenic pathways. Expression of a p35 transgene, which blocks the complete execution of the death program and generates the so-called 'undead cells', amplifies the proliferative response. Pseudouridine synthase depletion also causes loss of apicobasal polarity, disruption of adherens cell junctions and ectopic induction of JNK (c-Jun N-terminal kinase) and Mmp1 (matrix metalloproteinase-1) activity, leading to a significant epithelial reorganization. Unexpectedly, cell-nonautonomous effects, such as epithelial mesenchymal transition in the contiguous unsilenced squamous epithelium, are also promoted. Collectively, these data point out that cell-cell communication and long-range signaling can take a relevant role in the response to pseudouridine synthase decline. Considering that all the affected pathways are highly conserved throughout evolution, it is plausible that the response to pseudouridine synthase depletion has been widely preserved. On this account, our results can add new light on the still unexplained tumor predisposition that characterizes X-linked dyskeratosis, the human disease caused by reduced pseudouridine synthase activity.