The insulin signaling pathway plays key roles in systemic growth. TBC1D7 has recently been identified as the third subunit of the tuberous sclerosis complex (TSC), a negative regulator of cell growth. Here, we used Drosophila as a model system to dissect the physiological function of TBC1D7 in vivo. In mutants lacking TBC1D7, cell and organ growth were promoted, and TBC1D7 limited cell growth in a cell-nonautonomous and TSC-independent manner. TBC1D7 is specifically expressed in insulin-producing cells in the fly brain and regulated biosynthesis and release of insulin-like peptide 2, leading to systemic growth. Furthermore, animals carrying the dTBC1D7 mutation were hypoglycemic, short-lived, and sensitive to oxidative stress. Our findings provide new insights into the physiological function of TBC1D7 in the systemic control of growth, as well as insights into human disorders caused by TBC1D7 mutation.