Insulin and insulin growth factor have central roles in growth, metabolism and ageing of animals, including Drosophila melanogaster. In Drosophila, insulin-like peptides (Dilps) are produced by specialized neurons in the brain. Here we show that Drosophila short neuropeptide F (sNPF), an orthologue of mammalian neuropeptide Y (NPY), and sNPF receptor sNPFR1 regulate expression of Dilps. Body size was increased by overexpression of sNPF or sNPFR1. The fat body of sNPF mutant Drosophila had downregulated Akt, nuclear localized FOXO, upregulated translational inhibitor 4E-BP and reduced cell size. Circulating levels of glucose were elevated and lifespan was also extended in sNPF mutants. We show that these effects are mediated through activation of extracellular signal-related kinases (ERK) in insulin-producing cells of larvae and adults. Insulin expression was also increased in an ERK-dependent manner in cultured Drosophila central nervous system (CNS) cells and in rat pancreatic cells treated with sNPF or NPY peptide, respectively. Drosophila sNPF and the evolutionarily conserved mammalian NPY seem to regulate ERK-mediated insulin expression and thus to systemically modulate growth, metabolism and lifespan.