The differentiation efficiency of adult stem cells undergoes a significant decline in aged animals, which is closely related to the decline in organ function and age-associated diseases. However, the underlying mechanisms that ultimately lead to this observed decline of the differentiation efficiency of stem cells remain largely unclear. This study investigated Drosophila midguts and identified an obvious upregulation of caudal (cad), which encodes a homeobox transcription factor. This factor is traditionally known as a central regulator of embryonic anterior-posterior body axis patterning. This study reports that depletion of cad in intestinal stem/progenitor cells promotes quiescent intestinal stem cells (ISCs) to become activate and produce enterocytes in the midgut under normal gut homeostasis conditions. However, overexpression of cad results in the failure of ISC differentiation and intestinal epithelial regeneration after injury. Moreover, this study suggests that cad prevents intestinal stem/progenitor cell differentiation by modulating the Janus kinase/signal transducers and activators of the transcription pathway and Sox21a-GATAe signaling cascade. Importantly, the reduction of cad expression in intestinal stem/progenitor cells restrained age-associated gut hyperplasia in Drosophila. This study identified a function of the homeobox gene cad in the modulation of adult stem cell differentiation and suggested a potential gene target for the treatment of age-related diseases induced by age-related stem cell dysfunction.