Insulin regulates development, metabolism, and lifespan via a conserved PI3K/Akt pathway that promotes cytoplasmic sequestration of FoxO transcription factors. The regulation of nuclear FoxO is poorly understood. In the nematode Caenorhabditis elegans, insulin-like signaling functions in larvae to inhibit dauer arrest and acts during adulthood to regulate lifespan. In a screen for genes that modulate C. elegans insulin-like signaling, we identified eak-3, which encodes a novel protein that is specifically expressed in the two endocrine XXX cells. The dauer arrest phenotype of eak-3 mutants is fully suppressed by mutations in daf-16/FoxO, which encodes the major target of C. elegans insulin-like signaling, and daf-12, which encodes a nuclear receptor regulated by steroid hormones known as dafachronic acids. eak-3 mutation does not affect DAF-16/FoxO subcellular localization but enhances expression of the direct DAF-16/FoxO target sod-3 in a daf-16/FoxO- and daf-12-dependent manner. eak-3 mutants have normal lifespans, suggesting that EAK-3 decouples insulin-like regulation of development and longevity. We propose that EAK-3 activity in the XXX cells promotes the synthesis and/or secretion of a hormone that acts in parallel to AKT-1 to inhibit the expression of DAF-16/FoxO target genes. Similar hormonal pathways may regulate FoxO target gene expression in mammals.