Neuronal injury triggers robust responses from glial cells, including altered gene expression and enhanced phagocytic activity to ensure prompt removal of damaged neurons. The molecular underpinnings of glial responses to trauma remain unclear. Here, we find that the evolutionarily conserved insulin-like signaling (ILS) pathway promotes glial phagocytic clearance of degenerating axons in adult Drosophila. We find that the insulin-like receptor (InR) and downstream effector Akt1 are acutely activated in local ensheathing glia after axotomy and are required for proper clearance of axonal debris. InR/Akt1 activity, it is also essential for injury-induced activation of STAT92E and its transcriptional target draper, which encodes a conserved receptor essential for glial engulfment of degenerating axons. Increasing Draper levels in adult glia partially rescues delayed clearance of severed axons in glial InR-inhibited flies. We propose that ILS functions as a key post-injury communication relay to activate glial responses, including phagocytic activity.