Metazoans adapt to changing environmental conditions and to harmful challenges by attenuating growth and metabolic activities systemically. Recent studies in mice and flies indicate that endocrine signaling interactions between insulin/IGF signaling (IIS) and innate immune signaling pathways are critical for this adaptation, yet the temporal and spatial hierarchy of these signaling events remains elusive. Here, we identify and characterize a program of signaling interactions that regulates the systemic response of the Drosophila larva to localized DNA damage. We provide evidence that epidermal DNA damage induces an innate immune response that is kept in check by systemic repression of IIS activity. IIS repression induces NFκB/Relish signaling in the fat body, which is required for recovery of IIS activity in a second phase of the systemic response to DNA damage. This systemic response to localized DNA damage thus coordinates growth and metabolic activities across tissues, ensuring growth homeostasis and survival of the animal.