The receptor tyrosine kinase (RTK) pathway plays an essential role in development and disease by controlling cell proliferation and differentiation. Here, we profile the Drosophila larval brain by single cell RNA-sequencing and identify Amalgam (Ama), encoding a cell adhesion protein of the immunoglobulin IgLON family, that regulates the RTK pathway activity during glial cell development. Depletion of Ama reduces cell proliferation, affects glial cell type composition and disrupts the blood-brain barrier (BBB) that leads to hemocyte infiltration and neuronal death. We show that Ama depletion lowers RTK activity by upregulating Sprouty (Sty), a negative regulator of RTK pathway. Knockdown of Ama blocks oncogenic RTK signaling activation in the Drosophila glioma model and halts malignant transformation. Finally, knockdown of a human ortholog of Ama, LSAMP, results in upregulation of SPOUTY2 in glioblastoma cell lines suggesting that the relationship between Ama and Sty is conserved.