Obesity leads to impaired insulin signaling and tissue sensitivity, which drive the onset of type 2 diabetes. Insulin resistance leads to a reduction in cellular glucose uptake, resulting in elevated blood glucose levels, which consequently cause β-cell dysfunction and development of diabetes. Although improving insulin signaling is a key target for restoring whole-body glucose homeostasis and reversing diabetes, the multi-organ mechanisms that regulate insulin signaling and tissue sensitivity are poorly defined. We screened the secretome and receptome in Drosophila to identify the underlying interorgan hormonal crosstalk affecting diet-induced insulin resistance and obesity. We identified complex interplay between muscle, neuronal, and fat tissues, mediated by the conserved BMP and LGR signaling pathways, which augments insulin signaling and improves dietary sugar tolerance. We found that muscle-derived BMP signaling is induced by sugar and governs neuronal Bursicon signaling. Acting through its LGR-family receptor, Bursicon both enhances insulin secretion and improves insulin sensitivity in adipose tissue, thereby preventing sugar-induced hyperglycemia. Inhibition of Bursicon-LGR signaling in adipose tissue exacerbates sugar-induced insulin resistance, and we discovered that this condition could be alleviated by suppressing NF-κB signaling. Our findings identify a muscle-neuronal-fat tissue axis that drives metabolic adaptation to high-sugar conditions by modulating insulin secretion and adipocyte insulin sensitivity, highlighting mechanisms that may be exploited for the development of strategies for the treatment and reversal of insulin resistance.