In the fruit fly Drosophila, four insulin genes are coexpressed in small clusters of cells [insulin-producing cells (IPCs)] in the brain. Here, we show that ablation of these IPCs causes developmental delay, growth retardation, and elevated carbohydrate levels in larval hemolymph. All of the defects were reversed by ectopic expression of a Drosophila insulin transgene. On the basis of these functional data and the observation that IPCs release insulin into the circulatory system, we conclude that brain IPCs are the main systemic supply of insulin during larval growth. We propose that IPCs and pancreatic islet beta cells are functionally analogous and may have evolved from a common ancestral insulin-producing neuron. Interestingly, the phenotype of flies lacking IPCs includes certain features of diabetes mellitus.