The insulin/TOR signaling pathway plays a crucial role in animal homeostasis, sensing nutrient status to regulate organismal growth and metabolism. We identify here the Drosophila B′ regulatory subunit of PP2A (PP2A-B′) as a novel, conserved component of the insulin pathway that specifically targets the PP2A holoenzyme to dephosphorylate S6K. PP2A-B′ knockout flies have elevated S6K phosphorylation and exhibit phenotypes typical of elevated insulin signaling such as reduced total body triglycerides and reduced longevity. We show that PP2A-B′ interacts with S6K both physically and genetically. The human homolog of PP2A-B′, PPP2R5C, also counteracts S6K1 phosphorylation, indicating a conserved mechanism in mammals. Since S6K affects development of cancer and metabolic disease, our data identify PPP2R5C as a novel factor of potential medical relevance.