In many vertebrate and invertebrate organisms, gametes develop within groups of interconnected cells called germline cysts formed by several rounds of incomplete divisions. We found that loss of the deubiquitinase USP8 gene in Drosophila can transform incomplete divisions of germline cells into complete divisions. Conversely, overexpression of USP8 in germline stem cells is sufficient for the reverse transformation from complete to incomplete cytokinesis. The ESCRT-III proteins CHMP2B and Shrub/CHMP4 are targets of USP8 deubiquitinating activity. In Usp8 mutant sister cells, ectopic recruitment of ESCRT proteins at intercellular bridges causes cysts to break apart. A Shrub/CHMP4 variant that cannot be ubiquitinated does not localize at abscission bridges and cannot complete abscission. Our results uncover ubiquitination of ESCRT-III as a major switch between two types of cell division.