Insulin and glucagon play fundamental and counteractive roles in carbohydrate homeostasis. In addition to insulin resistance, enhanced glucagon action also contributes to hyperglycemia in the context of high caloric diet. In contrast to the wealth of knowledge regarding insulin action regulation, little is known about the physiological regulation of glucagon signaling. To identify new regulators of glucagon signaling, we established a conserved glucagon-induced hyperglycemia model in Drosophila overexpressing fly glucagon encoded by Akh (Adipokinetic hormone). We combined in vivo RNAi screen and genetic validation and identified the activin type I receptor, Baboon (Babo), and one of its ligand, Activin-β (Actβ), as important regulators of glucagon/AKH signaling. Deficiency of Babo or Actβ significantly impaired AKH action in the fat body which is equivalent to the liver, and abolished hyperglycemia associated with high-sugar diet in Drosophila. Importantly, Actβ production in enteroendocrine cells was significantly increased and promoted fat body AKH action and elevated glycemic level in response to high-sugar diet. Finally, we found that in mouse primary hepatocytes Activin A treatment potently enhances glucagon signaling as well as glucagon-induced glucose production. In summary, we have identified an evolutionarily conserved mechanism whereby activin signaling enhances glucagon action to impact hyperglycemia and/or diabetes pathogenesis.