Apoptosis culminates in the activation of caspase-3, which plays an important role in implementing the cell death program. Here, we reveal a non-apoptotic role of caspase-3 as a key regulator of cell proliferation, organ regeneration. Caspase-3 is specifically activated in the proliferating cells of the sebaceous gland but does not instruct cell elimination. Deletion or chemical inhibition of caspase-3 diminishes cell proliferation, decreases cell number and reduces sebaceous gland size in vivo. Exploring the underlying mechanism, we demonstrate that a-catenin is cleaved by caspase-3, thus facilitating the activation and nuclear translocation of yes-associated protein (YAP), a vital regulator of organ size. Accordingly, activation of caspase-3 leads to YAP-dependent organ size augmentation. Finally, we show that X-linked inhibitor of apoptosis protein (XIAP) serves as an endogenous feedback antagonist for the cas- pase-3/YAP signaling module. Taken together, here we report a molecular mechanism wherein the apoptotic machinery is refocused to regulate tissue regeneration and orchestrate organ size.