Despite two decades of research, the major function of FBP-family KH domain proteins during animal development remains controversial. The literature is divided between RNA processing and transcriptional functions for these single stranded nucleic acid binding proteins. Using Drosophila, where the three mammalian FBP proteins (FBP1-3) are represented by one ortholog, Psi, we demonstrate the primary developmental role is control of cell and tissue growth. Co-IP-mass spectrometry positioned Psi in an interactome predominantly comprised of RNA Polymerase II (RNA Pol II) transcriptional machinery and we demonstrate Psi is a potent transcriptional activator. The most striking interaction was between Psi and the transcriptional mediator (MED) complex, a known sensor of signaling inputs. Moreover, genetic manipulation of MED activity modified Psi-dependent growth, which suggests Psi interacts with MED to integrate developmental growth signals. Our data suggest the key target of the Psi/MED network in controlling developmentally regulated tissue growth is the transcription factor MYC. As FBP1 has been implicated in controlling expression of the MYC oncogene, we predict interaction between MED and FBP1 might also have implications for cancer initiation and progression.