Sphingolipids are essential membrane components of the neuron; hence their levels need to be tightly regulated. Infertile crescent (Ifc) is an evolutionarily conserved dihydroceramide (DHC) desaturase which converts DHC to Ceramide (Cer) for the de novo synthesis of Cer in Drosophila. While the imbalance of Cer, a bioactive sphingolipid, has been associated with several neurodegenerative diseases, the neuronal function of its precursor DHC remains unknown. To investigate the role of ifc, we generated ifc knockout flies (ifc-KO). Sphingolipidomic analysis showed that loss of ifc resulted in increased DHC. Prolonged light stimuli to the ifc-KO eye led to activity-dependent degeneration of photoreceptors. Clonal analysis of ifc-KO photoreceptors revealed the accumulation of lipophagic structure and the increased H2DCF signals upon light stimuli, suggesting that DHC accumulation may activate lipophagy and induce the production of reactive oxygen species (ROS). However, it remains to be determined whether the degeneration is attributed to lipophagic cell death or the ROS insults. Reduction of ifc led to the increase of Atg8/LC3 puncta in the acidified compartment and elevation of lysosomal proteases, indicating the activated lipophagy can promote subsequent lysosomal function. ifc-dependent neurodegeneration can be partially rescued by an antioxidant AD4, indicating that ROS is at least partially responsible for the degeneration. In addition, both ROS elevation and lipid accumulation in ifc-KO was suppressed by treating with the autophagy inducer Rapamycin, suggesting that enhanced lipophagy plays a protective role in ifc-dependent neurodegeneration. Conversely, lipophagy can be downregulated by AD4, indicating ROS insults lead to the feedback upregulation of protective lipophagy. In summary, loss of ifc results in DHC accumulation and ROS generation, the latter of which subsequently activates lipophagy to protect against neurodegeneration. These findings support our hypothesis that DHC is bio-active and lipophagy can be protective, highlighting their potential as therapeutic targets for regulating sphingolipid homeostasis.