The sphingolipid ceramide elicits several stress responses, however, organisms survive despite increased ceramide but how they do so is poorly understood. We demonstrate here that the AKT/FOXO pathway regulates survival in increased ceramide environment by metabolic adaptation involving changes in glycolysis and lipolysis through novel downstream targets. We show that ceramide kinase mutants accumulate ceramide and this leads to reduction in energy levels due to compromised oxidative phosphorylation. Mutants show increased activation of Akt and a consequent decrease in FOXO levels. These changes lead to enhanced glycolysis by upregulating the activity of phosphoglyceromutase, enolase, pyruvate kinase, and lactate dehydrogenase to provide energy. A second major consequence of AKT/FOXO reprogramming in the mutants is the increased mobilization of lipid from the gut through novel lipase targets, CG8093 and CG6277 for energy contribution. Ubiquitous reduction of these targets by knockdown experiments results in semi or total lethality of the mutants, demonstrating the importance of activating them. The efficiency of these adaptive mechanisms decreases with age and leads to reduction in adult life span of the mutants. In particular, mutants develop cardiac dysfunction with age, likely reflecting the high energy requirement of a well-functioning heart. The lipases also regulate physiological triacylglycerol homeostasis and are important for energy metabolism since midgut specific reduction of them in wild type flies results in increased sensitivity to starvation and accumulation of triglycerides leading to cardiac defects. The central findings of increased AKT activation, decreased FOXO level and activation of phosphoglyceromutase and pyruvate kinase are also observed in mice heterozygous for ceramide transfer protein suggesting a conserved role of this pathway in mammals. These data reveal novel glycolytic and non-autonomous lipolytic pathways in response to increased ceramide for sustenance of high energy demanding organ functions like the heart.