In Drosophila, nutrient status is sensed by the fat body, a functional homolog of mammalian liver and white adipocytes. The fat body conveys nutrient information to insulin-producing cells through humoral factors which regulate Drosophila insulin-like peptide levels and insulin signalling. Insulin signalling has pleiotropic functions, which include the management of growth and metabolic pathways. Here, we report that Edem1 (endoplasmic reticulum degradation-enhancing α-mannosidase-like protein 1), an endoplasmic reticulum-resident protein involved in protein quality control, acts in the fat body to regulate insulin signalling and thereby the metabolic status in Drosophila Edem1 limits the fat body-derived Drosophila tumor necrosis factor-α Eiger activity on insulin-producing cells and maintains systemic insulin signalling in fed conditions. During food deprivation, edem1 gene expression levels drop, which aids in the reduction of systemic insulin signalling crucial for survival. Overall, we demonstrate that Edem1 plays a vital role in helping the organism to endure a fluctuating nutrient environment by managing insulin signalling and metabolic homeostasis.