Type 2 diabetes mellitus (T2D) is a metabolic disorder caused by a complex interplay between genetic and environmental factors. While remarkable progress have been made in our understanding of the genetic components that lead to disease expression, the 'diabetes genes' identified to date are inadequate for assessing disease risk, which suggests that many other genes remain to be discovered. Here, we used Drosophila to examine the protein-coding genes annotated in the hyperglycaemic locus of Otsuka Long-Evans Tokushima Fatty (OLETF) rats, a well-characterized model of T2D. We identified lilliputian (lilli), a fly homolog of AF4/FMR2 family member 2, as a novel candidate gene for T2D. Lilli knockdown adult females had significantly higher haemolymph trehalose and glucose levels, while dilp2, which plays a major role in sugar metabolism, was downregulated. Tissue-specific knockdown strain revealed that lilli plays a crucial function in oenocytes and the fat body, which together are homologous organs to the liver. Together, these findings demonstrate the importance of using fly models for investigating polygenic diseases such as T2D.