Cell proliferation, growth and survival are three different basic processes which converge at determining a fundamental property -the size of an organism. Scalloped (Sd) is the first characterised transcriptional partner to Yorkie (Yki), the downstream effector of the Hippo pathway which is a highly potential and evolutionarily conserved regulator of organ size. Here we have studied the hypomorphic effect of sd on the development of Mushroom Bodies (MBs) in Drosophila brain. We show that, sd non-function results in an increase in the size of MBs. We demonstrate that, sd regulation on MB size operates through multiple routes. Sd expressed in the differentiated MB neurons, imposes non-cell autonomous repression on the proliferation of MB precursor cells, and Sd expression in the MB neuroblasts (NB) cell autonomously represses mushroom body neuroblast (MBNB) proliferation. Further Sd in Kenyon cells (KCs) imparts a cell autonomous restriction on their growth. Our findings are distinctive because, while the classical sd loss of function phenotypes in eye, wing and lymph gland are reported as loss of tissue or reduced organ size, the present study shows that, Sd inactivation in the developing MB, promotes precursor cell proliferation and results in an increase in the organ size.