Insulin-resistant, 'type 2' diabetes (T2D) results from a complex interplay between genes and environment. In particular, both caloric excess and obesity are strongly associated with T2D across many genetic backgrounds. To gain insights into how dietary excess affects insulin resistance, we studied the simple model organism Drosophila melanogaster. Larvae reared on a high-sugar diet were hyperglycemic, insulin resistant and accumulated fat--hallmarks of T2D--compared with those reared on control diets. Excess dietary sugars, but not fats or proteins, elicited insulin-resistant phenotypes. Expression of genes involved in lipogenesis, gluconeogenesis and β-oxidation was upregulated in high-sugar-fed larvae, as were FOXO targets, consistent with known mechanisms of insulin resistance in humans. These data establish a novel Drosophila model of diet-induced insulin resistance that bears strong similarity to the pathophysiology of T2D in humans.