Neuroprotection is essential for the maintenance of normal physiological functions in the nervous system. This is especially true under stress conditions. Here, we demonstrate a novel protective function of PRL-1 against CO2 stimulation in Drosophila. In the absence of PRL-1, flies exhibit a permanent held-up wing phenotype upon CO2 exposure. Knockdown of the CO2 olfactory receptor, Gr21a, suppresses the phenotype. Our genetic data indicate that the wing phenotype is due to a neural dysfunction. PRL-1 physically interacts with Uex and controls Uex expression levels. Knockdown of Uex alone leads to a similar wing held-up phenotype to that of PRL-1 mutants. Uex acts downstream of PRL-1. Elevated Uex levels in PRL-1 mutants prevent the CO2-induced phenotype. PRL-1 and Uex are required for a wide range of neurons to maintain neuroprotective functions. Expression of human homologs of PRL-1 could rescue the phenotype in Drosophila, suggesting a similar function in humans.