Members of the Myc family of proto-oncogenes have long been implicated in regulating proliferation, apoptosis and oncogenesis. Recently, transcriptional and biological studies have suggested a direct role for Myc in regulating growth. We have used dm4, a new null allele of the Drosophila diminutive (dm) gene, which encodes dMyc on the X chromosome, to investigate a role for dMyc in larval endoreplicating tissues,where cellular growth and DNA replication occur in the absence of cell division. Hemizygous dm4/Y mutants arrest as second instar larvae, and fat body nuclei of dm4/Y mutants fail to attain normal size and normal levels of DNA, resulting from a reduced frequency of S-phase. Thus, dMyc is required for endoreplication and larval growth. In support of this, dMyc, as well as its antagonist dMnt, are expressed in larval tissues in a pattern consistent with their involvement in regulating endoreplication. Overexpression of dMyc in endoreplicating cells results in dramatic increases in nuclear DNA content and cell and nucleolar size, whereas dMnt overexpression has the opposite effect. BrdU incorporation and Cyclin E protein levels continue to oscillate in dMyc-overexpressing cells, indicating that the normal cell cycle control mechanisms are not disrupted. dMyc driven growth and endoreplication are strongly attenuated when the endocycle is blocked with Cyclin E or the cdk inhibitor p21. By contrast,the ability of dMyc to promote growth and endoreplication is only partly reduced when PI3K activity is blocked, suggesting that they influence distinct growth pathways. Our results indicate that larval growth and endoreplication are coupled processes that, although linked to cell cycle control mechanisms,are regulated by dMyc and dMnt.