A major goal in the study of adult stem cells is to understand how cell fates are specified at the proper time and place to facilitate tissue homeostasis. Here, we found that an E2 ubiquitin ligase, Bendless (Ben), has multiple roles in the Drosophila ovarian epithelial follicle stem cell (FSC) lineage. First, Ben is part of the JNK signaling pathway, and we found that it, as well as other JNK pathway genes, are essential for differentiation of FSC daughter cells. Our data suggest that JNK signaling promotes differentiation by suppressing the activation of the EGFR effector, ERK. Also, we found that loss of ben, but not the JNK kinase hemipterous, resulted in an upregulation of hedgehog signaling, increased proliferation and increased niche competition. Lastly, we demonstrate that the hypercompetition phenotype caused by loss of ben is suppressed by decreasing the rate of proliferation or knockdown of the hedgehog pathway effector, Smoothened (Smo). Taken together, our findings reveal a new layer of regulation in which a single gene influences cell signaling at multiple stages of differentiation in the early FSC lineage.