Several regulators of endocytic trafficking have recently been identified as tumour suppressors in Drosophila. These include components of the endosomal sorting complex required for transport (ESCRT) machinery. Disruption of subunits of ESCRT-I and -II leads to cell-autonomous endosomal accumulation of ubiquitinated receptors, loss of apicobasal polarity and epithelial integrity, and increased cell death. Here we report that disruption of the ATPase dVps4, the most downstream component of the ESCRT machinery, causes the same array of cellular phenotypes. We find that loss of epithelial integrity and increased apoptosis, but not loss of cell polarity, require the activation of JNK signalling. Abrogation of JNK signalling prevents apoptosis in dVps4 deficient cells. Indeed double deficiency in dVps4 and JNK signalling leads to the formation of neoplastic tumours. We conclude that dvps4 is a tumour suppressor in Drosophila and that JNK is central to the cell-autonomous phenotypes of ESCRT-deficient cells.