Translating advances in cancer research to clinical applications requires better insight into the metabolism of normal cells and tumour cells in vivo. Much effort has focused on understanding how glycolysis and oxidative phosphorylation (OxPhos) support proliferation, while their impact on other aspects of development and tumourigenesis remain largely unexplored. We found that inhibition of OxPhos in neural stem cells (NSCs) or tumours in the Drosophila brain not only decreases proliferation, but also affects many different aspects of stem cell behaviour. In NSCs, OxPhos dysfunction leads to a protracted G1/S-phase and results in delayed temporal patterning and reduced neuronal diversity. As a consequence, NSCs fail to undergo terminal differentiation, leading to prolonged neurogenesis into adulthood. Similarly, in brain tumours inhibition of OxPhos slows proliferation and prevents differentiation, resulting in reduced tumour heterogeneity. Thus, in vivo, highly proliferative stem cells and tumour cells require OxPhos for efficient growth and generation of diversity.