The Hippo tumor suppressor pathway in Drosophila represses expression of DIAP1 and Cyclin E via inactivation of the transcription co-activator Yorkie, resulting in cell cycle arrest and induction of apoptosis. The warts (wts) gene is well known as a core kinase in this pathway, but its transcriptional regulation has yet to be clarified. In Drosophila, DREF binds to a target sequence named DRE (5'-TATCGATA) and regulates transcription of cell proliferation-related genes containing the DRE sequence in their promoter regions. Here we found half reduction of the wts gene dose to enhance the DREF-induced rough eye phenotype, suggesting a DREF genetic interaction with the Hippo pathway in vivo. Three DREs indentified in the wts gene promoter region exhibited strong promoter activity with a luciferase transient expression assay in Drosophila S2 cells, this decreasing under DREF-RNAi conditions. In addition, knockdown of DREF in S2 cells reduced the level of endogenous wts mRNA. Chromatin immunoprecipitation assays with anti-DREF antibody revealed that DREF binds specifically to the wts gene promoter region containing DREs in vivo. These results indicate that the DRE/DREF pathway is required for transcriptional regulation of the wts gene, indicating a novel link between the DRE/DREF and the Hippo pathways.