A large population of proliferative stem cells (neoblasts) is required for physiological tissue homeostasis and post-injury regeneration in planarians. Recent studies indicate that survival of a few neoblasts after sublethal irradiation results in the clonal expansion of the surviving stem cells and the eventual restoration of tissue homeostasis and regenerative capacity. However, the precise mechanisms regulating the population dynamics of neoblasts remain largely unknown. Here, we uncovered a central role for epidermal growth factor (EGF) signaling during in vivo neoblast expansion mediated by Smed-egfr-3 (egfr-3) and its putative ligand Smed-neuregulin-7 (nrg-7). Furthermore, the EGF receptor-3 protein localizes asymmetrically on the cytoplasmic membrane of neoblasts, and the ratio of asymmetric to symmetric cell divisions decreases significantly in egfr-3(RNAi) worms. Our results not only provide the first molecular evidence of asymmetric stem cell divisions in planarians, but also demonstrate that EGF signaling likely functions as an essential regulator of neoblast clonal expansion.