The evolutionarily conserved JAK/STAT pathway plays important roles in development and disease processes in humans. Although the signaling process has been well established, we know relatively little about what the relevant target genes are that mediate JAK/STAT activation during development. Here, we have used genome-wide microarrays to identify JAK/STAT targets in the optic lobes of the Drosophila brain and identified 47 genes that are positively regulated by JAK/STAT. About two-thirds of the genes encode proteins that have orthologs in humans. The STAT targets in the optic lobe appear to be different from the targets identified in other tissues, suggesting that JAK/STAT signaling may regulate different target genes in a tissue-specific manner. Functional analysis of Nop56, a cell-autonomous STAT target, revealed an essential role for this gene in the growth and proliferation of neuroepithelial stem cells in the optic lobe and an inhibitory role in lamina neurogenesis.