Animals need to continuously adjust their water metabolism to the internal and external conditions. Homeostasis of body fluids thus requires tight regulation of water intake and excretion, and a balance between ingestion of water and solid food. Here, we investigated how these processes are coordinated in Drosophila melanogaster. We identified the first thirst-promoting and anti-diuretic hormone of Drosophila, encoded by the gene Ion transport peptide (ITP). This endocrine regulator belongs to the CHH (crustacean hyperglycemic hormone) family of peptide hormones. Using genetic gain- and loss-of-function experiments, we show that ITP signaling acts analogous to the human vasopressin and renin-angiotensin systems; expression of ITP is elevated by dehydration of the fly, and the peptide increases thirst while repressing excretion, promoting thus conservation of water resources. ITP responds to both osmotic and desiccation stress, and dysregulation of ITP signaling compromises the fly's ability to cope with these stressors. In addition to the regulation of thirst and excretion, ITP also suppresses food intake. Altogether, our work identifies ITP as an important endocrine regulator of thirst and excretion, which integrates water homeostasis with feeding of Drosophila.