The Phosphatidylinositol-3 kinase/Protein Kinase B (PI3K/PKB) signaling pathway controls growth, metabolism, and lifespan in animals, and deregulation of its activity is associated with diabetes and cancer in humans. Here, we describe Susi, a coiled-coil domain protein that acts as a negative regulator of insulin signaling in Drosophila. Whereas loss of Susi function increases body size, overexpression of Susi reduces growth. We provide genetic evidence that Susi negatively regulates dPI3K activity. Susi directly binds to dP60, the regulatory subunit of dPI3K. Since Susi has no overt similarity to known inhibitors of PI3K/PKB signaling, it defines a novel mechanism by which this signaling cascade is kept in check. The fact that Susi is expressed in a circadian rhythm, with highest levels during the night, suggests that Susi attenuates insulin signaling during the fasting period.