A major challenge in understanding energy balance is deciphering the neural and molecular circuits that govern behavioral, physiological, and metabolic responses of animals to fluctuating environmental conditions. The neurally expressed TGF-beta ligand DAF-7 functions as a gauge of environmental conditions to modulate energy balance in C. elegans. We show that daf-7 signaling regulates fat metabolism and feeding behavior through a compact neural circuit that allows for integration of multiple inputs and the flexibility for differential regulation of outputs. In daf-7 mutants, perception of depleting food resources causes fat accumulation despite reduced feeding rate. This fat accumulation is mediated, in part, through neural metabotropic glutamate signaling and upregulation of peripheral endogenous biosynthetic pathways that direct energetic resources into fat reservoirs. Thus, neural perception of adverse environmental conditions can promote fat accumulation without a concomitant increase in feeding rate.