The specific role of chromatin modifying factors in the timely execution of transcriptional changes in gene expression to regulate organ size remains largely unknown. Here, we report that in Drosophila melanogaster depletion of the histone demethylase dLsd1 results in the reduction of wing size. dLsd1 depletion affects cell proliferation and causes an increase in DNA damage and cell death. Mechanistically, we have identified Transposable Elements (TEs) as critical dLsd1 targets for organ size determination. We found that upon dLsd1 loss many TE families are upregulated, and new TE insertions appear. By blocking this new TE activity, we could rescue the wing size phenotype. Collectively, our results reveal that the histone demethylase dLsd1 and maintenance of TE homeostasis are required to ensure proper wing size.