The escort factor Scap is essential in mammalian cells for regulated activation of sterol regulatory element binding proteins (SREBPs). SREBPs are membrane-bound transcription factors. Cells lacking Scap cannot activate SREBP. They are therefore deficient in the transcription of numerous genes involved in lipid synthesis and uptake; they cannot survive in the absence of exogenous lipid. Here we report that, in contrast to mammalian cells, Drosophila completely lacking dscap are viable. Flies lacking dscap emerge at approximately 70% of the expected rate and readily survive as homozygous stocks. These animals continue to cleave dSREBP in some tissues. Transcription of dSREBP target genes in dscap mutant larvae is reduced compared to wild type. It is greater than in mutants lacking dSREBP and remains responsive to dietary lipids in dscap mutants. Flies lacking dscap do not require the caspase Drice to activate dSREBP. This contrasts with ds2p mutants. ds2p encodes a protease that releases the transcription factor domain of dSREBP from the membrane. Larvae doubly mutant for dscap and ds2p exhibit phenotypes similar to those of ds2p single mutants. Thus, dScap and dS2P, essential components of the SREBP activation machinery in mammalian cells, are dispensable in Drosophila owing to different compensatory mechanisms.