Neural stem cells (NSCs) divide asymmetrically to balance their self-renewal and differentiation, an imbalance in which can lead to NSC overgrowth and tumor formation. The functions of Parafibromin, a conserved tumor suppressor, in the nervous system are not established. Here, we demonstrate that Drosophila Parafibromin/Hyrax (Hyx) inhibits ectopic NSC formation by governing cell polarity. Hyx is essential for the asymmetric distribution and/or maintenance of polarity proteins. hyx depletion results in the symmetric division of NSCs, leading to the formation of supernumerary NSCs in the larval brain. Importantly, we show that human Parafibromin rescues the ectopic NSC phenotype in Drosophila hyx mutant brains. We have also discovered that Hyx is required for the proper formation of interphase microtubule-organizing center and mitotic spindles in NSCs. Moreover, Hyx is required for the proper localization of 2 key centrosomal proteins, Polo and AurA, and the microtubule-binding proteins Msps and D-TACC in dividing NSCs. Furthermore, Hyx directly regulates the polo and aurA expression in vitro. Finally, overexpression of polo and aurA could significantly suppress ectopic NSC formation and NSC polarity defects caused by hyx depletion. Our data support a model in which Hyx promotes the expression of polo and aurA in NSCs and, in turn, regulates cell polarity and centrosome/microtubule assembly. This new paradigm may be relevant to future studies on Parafibromin/HRPT2-associated cancers.