Insulin signaling plays a central role in the regulation of systemic growth in Drosophila, and therefore is critical in the determination of final body size. However, the mechanisms regulating insulin secretion remain poorly understood. In a forward genetic screen for mutants with reduced body size, we identified 5 alleles of a novel gene, which we named hobbit. Hobbit is highly conserved from yeast to humans, but no function has been assigned to the protein in any organism. Our results demonstrate that hobbit has a non-cell autonomous effect on growth, indicating that the small body size of the mutants is due to a systemic growth defect. We found that hobbit mutants exhibit dramatic defects in insulin secretion, and this defect is directly responsible for the small body size of the mutant animals. Importantly, these insulin secretion defects can be rescued by expressing Hobbit specifically in tissues required for insulin secretion. Furthermore, we demonstrate that expression of the human ortholog of hobbit is sufficient to rescue the fly mutant, suggesting that the function of hobbit in insulin secretion is conserved. We are currently focused on analyzing the mechanism by which hobbit regulates secretion of insulin, and our results indicate that hobbit is required for a novel step in the regulated exocytosis pathway. Overall, we have identified a novel regulator of exocytosis that is required for insulin secretion and the control of systemic growth during development.