Animals perform or terminate particular behaviors by integrating external cues and internal states through neural circuits. Identifying neural substrates and their molecular modulators promoting or inhibiting animal behaviors are key steps to understand how neural circuits control behaviors. Here, we identify the Cholecystokinin-like peptide Drosulfakinin (DSK) that functions at single-neuron resolution to suppress male sexual behavior in Drosophila. We found that Dsk neurons physiologically interact with male-specific P1 neurons, part of a command center for male sexual behaviors, and function oppositely to regulate multiple arousal-related behaviors including sex, sleep and spontaneous walking. We further found that the DSK-2 peptide functions through its receptor CCKLR-17D3 to suppress sexual behaviors in flies. Such a neuropeptide circuit largely overlaps with the fruitless-expressing neural circuit that governs most aspects of male sexual behaviors. Thus DSK/CCKLR signaling in the sex circuitry functions antagonistically with P1 neurons to balance arousal levels and modulate sexual behaviors.