Mammalian MANF and CDNF proteins are evolutionarily conserved neurotrophic factors that can protect and repair mammalian dopaminergic neurons in vivo. In Drosophila, the sole MANF protein (DmManf) is needed for the maintenance of dopaminergic neurites and dopamine levels. Although both secreted and intracellular roles for MANF and CDNF have been demonstrated, very little is known about the molecular mechanism of their action. Here, by using a transgenic rescue approach in the DmManf mutant background we show that only full-length MANF containing both the amino-terminal saposin-like and carboxy-terminal SAP-domains can rescue the larval lethality of the DmManf mutant. Independent N- or C-terminal domains of MANF, even when co-expressed together, fail to rescue. Deleting the signal peptide or mutating the CXXC motif in the C-terminal domain destroys the activity of full-length DmManf. Positively charged surface amino acids and the C-terminal endoplasmic reticulum retention signal are necessary for rescue of DmManf mutant lethality when DmManf is expressed in a restricted pattern. Furthermore, rescue experiments with non-ubiquitous expression reveals functional differences between the C-terminal domain of human MANF and CDNF. Finally, DmManf and its C-terminal domain rescue mammalian sympathetic neurons from toxin-induced apoptosis in vitro demonstrating functional similarity of the mammalian and fly proteins. Our study offers further insights into the functional conservation between invertebrate and mammalian MANF/CDNF proteins and reveals the importance of the C-terminal domain for MANF activity in vivo.