The PIWI-interacting RNA (piRNA) pathway is an evolutionarily conserved defence mechanism against transposable elements. It was originally discovered in the germline systems, however, recent works identified their roles in non-gonadal tissues. Here we characterise a role of the PIWI family protein Aubergine in fruit fly intestinal stem cells. We find that upregulation of Aubergine by bacteria-induced epithelial damage drives regenerative stem cell proliferation through increased protein synthesis, including translation of stem cell marker transcription factors Myc and Sox21a. Interestingly, such roles of Aubergine in intestinal stem cells appear uncoupled from its small RNA binding capacity and catalytic activity. Additionally, Aubergine and mammalian PIWIL1 mediate tumourigenic intestinal growth in Drosophila and human organoids derived from colorectal cancer patients, respectively. Thus, our results reveal an unexpected link between the germline small RNA pathway and the somatic stem cell proliferation.