Insulin Degrading Enzyme (IDE) is a protease conserved through evolution with a role in diabetes and Alzheimer's disease. The reason underlying its ubiquitous expression including cells lacking identified IDE substrates remains unknown. Here we show that the fission yeast IDE homologue (Iph1) modulates cellular sensitivity to endoplasmic reticulum (ER) stress in a manner dependent on TORC1 (Target of Rapamycin Complex 1). Reduced sensitivity to tunicamycin was associated with a smaller number of cells undergoing apoptosis. Wild type levels of tunicamycin sensitivity were restored in iph1 null cells when the TORC1 complex was inhibited by rapamycin or by heat inactivation of the Tor2 kinase. Although Iph1 cleaved hallmark IDE substrates including insulin efficiently, its role in the ER stress response was independent of its catalytic activity since expression of inactive Iph1 restored normal sensitivity. Importantly, wild type as well as inactive human IDE complemented gene-invalidated yeast cells when expressed at the genomic locus under the control of iph1(+) promoter. These results suggest that IDE has a previously unknown function unrelated to substrate cleavage, which links sensitivity to ER stress to a pro-survival role of the TORC1 pathway.