Metabolic diseases such as type 2 diabetes are associated with increased cancer incidence. Here, we show that hyperinsulinemia promotes epithelial tumorigenesis by abrogating cell competition. In Drosophila eye imaginal epithelium, oncogenic scribble (scrib) mutant cells are eliminated by cell competition when surrounded by wild-type cells. Through a genetic screen, we find that flies heterozygous for the insulin receptor substrate chico allow scrib cells to evade cell competition and develop into tumors. Intriguingly, chico is required in the brain's insulin-producing cells (IPCs) to execute cell competition remotely. Mechanistically, chico downregulation in IPCs causes hyperinsulinemia by upregulating a Drosophila insulin Dilp2, which activates insulin-mTOR signaling and thus boosts protein synthesis in scrib cells. A diet-induced increase in insulin levels also triggers scrib tumorigenesis, and pharmacological repression of protein synthesis prevents hyperinsulinemia-induced scrib overgrowth. Our findings provide an in vivo mechanistic link between metabolic disease and cancer risk via systemic regulation of cell competition.