While high-caloric diet impairs insulin response to cause hyperglycemia, whether and how counter-regulatory hormones are modulated by high-caloric diet is largely unknown. We find that enhanced response of Drosophila adipokinetic hormone (AKH, the glucagon homolog) in the fat body is essential for hyperglycemia associated with a chronic high-sugar diet. We show that the activin type I receptor Baboon (Babo) autonomously increases AKH signaling without affecting insulin signaling in the fat body via, at least, increase of Akh receptor (AkhR) expression. Further, we demonstrate that Activin-β (Actβ), an activin ligand predominantly produced in the enteroendocrine cells (EEs) of the midgut, is upregulated by chronic high-sugar diet and signals through Babo to promote AKH action in the fat body, leading to hyperglycemia. Importantly, activin signaling in mouse primary hepatocytes also increases glucagon response and glucagon-induced glucose production, indicating a conserved role for activin in enhancing AKH/glucagon signaling and glycemic control.