Multiple signaling pathways guide the behavior and differentiation of both germline stem cells (GSCs) and somatic follicle stem cells (FSCs) in the Drosophila germarium, necessitating careful control of signal generation, range and responses. Signal integration involves escort cells (ECs), which promote differentiation of the GSC derivatives they envelop, provide niche signals for FSCs and derive directly from FSCs in adults. Hedgehog (Hh) signaling induces the Hippo pathway effector Yorkie (Yki) to promote proliferation and maintenance of FSCs, but Hh also signals to ECs, which are quiescent. Here, we show that in ECs both Hh and Yki limit production of BMP ligands to allow germline differentiation. Loss of Yki produced a more severe germarial phenotype than loss of Hh signaling and principally induced a different BMP ligand. Moreover, Yki activity reporters and epistasis tests showed that Yki does not mediate the key actions of Hh signaling in ECs. Thus, both the coupling and output of the Hh and Yki signaling pathways differ between FSCs and ECs despite their proximity and the fact that FSCs give rise directly to ECs.