In C. elegans mechanisms by which peripheral organs relay internal state information to the nervous system remain unknown, although strong evidence suggests that such signals do exist. Here we report the discovery of a peptide of the ancestral insulin superfamily called INS-7 that functions as an enteroendocrine peptide and is secreted from specialized cells of the intestine. INS-7 secretion increases during fasting, and acts as a bona fide gut-to-brain homeostatic signal that attenuates neuronally induced fat loss during food shortage. INS-7 functions as an antagonist at the canonical DAF-2 receptor in the nervous system, and phylogenetic analysis suggests that INS-7 bears greater resemblance to members of the broad insulin/relaxin superfamily than to conventional mammalian insulin and IGF peptides. The discovery of an endogenous insulin antagonist secreted by specialized intestinal cell with enteroendocrine functions suggests that much remains to be learned about the intestine and its role in directing neuronal functions.