Differentiation of stem/progenitor cells is associated with a substantial increase in mitochondrial mass and complexity. Mitochondrial dynamics, including the processes of fusion and fission, plays an important role for somatic cell reprogramming and pluripotency maintenance in induced pluripotent cells (iPSCs). However, the role of mitochondrial dynamics during stem/progenitor cell differentiation in vivo remains elusive. Here we found differentiation of Drosophila intestinal stem cell is accompanied with continuous mitochondrial fusion. Mitochondrial fusion defective(opa1RNAi) ISCs contain less mitochondrial membrane potential, reduced ATP, and increased ROS level. Surprisingly, suppressing fusion also resulted in the failure of progenitor cells to differentiate. Cells did not switch on the expression of differentiation markers, and instead continued to show characteristics of progenitor cells. Meanwhile, proliferation or apoptosis was unaffected. The differentiation defect could be rescued by concomitant inhibition of Drp1, a mitochondrial fission molecule. Moreover, ROS scavenger also partially rescues opa1RNAi-associated differentiation defects via down-regulating JNK activity. We propose that mitochondrial fusion plays a pivotal role in controlling the developmental switch of stem cell fate.