The precise mechanism by which insulin is degraded in mammalian cells is not presently known. Several lines of evidence suggest that degradation is initiated by a specific nonlysosomal insulin-degrading enzyme (IDE). The potential importance of this insulin protease is illustrated by the fact that there is an IDE in Drosophila melanogaster Kc cells that shares both physical and kinetic properties with its mammalian counterpart. We now demonstrate that the IDE is present in other Drosophila cell lines and in the embryo, the larvae, the pupae, and adult tissues of the fruit fly. Further, the level of the IDE is developmentally regulated, being barely detectable in the embryo but elevated approximately 5-fold in the larvae and pupae and approximately 10-fold in the adult fly. The IDE levels in the cell lines are particularly high, at least 10-fold greater than in the adult fly. Analysis of Schneider L3 cells indicates that the addition of the Drosophila hormone ecdysone, which induces differentiation of the cells, causes a small but reproducible increase in the level of the IDE and the insulin-degrading activity. These results demonstrate that the IDE is evolutionarily conserved and that its expression is tightly regulated during differentiation of Drosophila. The particular pattern of developmental regulation suggests that the IDE plays a specific and critical role in the later stages of the life cycle of the fly.