A decline in protein homeostasis (proteostasis) has been proposed as a hallmark of aging. Somatic stem cells (SCs) uniquely maintain their proteostatic capacity through mechanisms that remain incompletely understood. Here, we describe and characterize a 'proteostatic checkpoint' in Drosophila intestinal SCs (ISCs). Following a breakdown of proteostasis, ISCs coordinate cell cycle arrest with protein aggregate clearance by Atg8-mediated activation of the Nrf2-like transcription factor cap-n-collar C (CncC). CncC induces the cell cycle inhibitor Dacapo and proteolytic genes. The capacity to engage this checkpoint is lost in ISCs from aging flies, and we show that it can be restored by treating flies with an Nrf2 activator, or by over-expression of CncC or Atg8a. This limits age-related intestinal barrier dysfunction and can result in lifespan extension. Our findings identify a new mechanism by which somatic SCs preserve proteostasis, and highlight potential intervention strategies to maintain regenerative homeostasis.