Glial cells are exquisitely sensitive to neuronal injury but mechanisms by which glia establish competence to respond to injury, continuously gauge neuronal health, and rapidly activate reactive responses remain poorly defined. Here, we show glial PI3K signaling in the uninjured brain regulates baseline levels of Draper, a receptor essential for Drosophila glia to sense and respond to axonal injury. After injury, Draper levels are up-regulated through a Stat92E-modulated, injury-responsive enhancer element within the draper gene. Surprisingly, canonical JAK/STAT signaling does not regulate draper expression. Rather, we find injury-induced draper activation is downstream of the Draper/Src42a/Shark/Rac1 engulfment signaling pathway. Thus, PI3K signaling and Stat92E are critical in vivo regulators of glial responsiveness to axonal injury. We provide evidence for a positive auto-regulatory mechanism whereby signaling through the injury-responsive Draper receptor leads to Stat92E-dependent, transcriptional activation of the draper gene. We propose that Drosophila glia use this auto-regulatory loop as a mechanism to adjust their reactive state following injury.