Environmental factors challenge the physiological homeostasis in animals, thereby evoking stress responses. Various mechanisms have evolved to counter stress at the organism level, including regulation by neuropeptides. In recent years, much progress has been made on the mechanisms and neuropeptides that regulate responses to metabolic/nutritional stress, as well as those involved in countering osmotic and ionic stresses. Here, we identified a peptidergic pathway that links these types of regulatory functions. We uncover the neuropeptide Corazonin (Crz), previously implicated in responses to metabolic stress, as a neuroendocrine factor that inhibits the release of a diuretic hormone, CAPA, and thereby modulates the tolerance to osmotic and ionic stress. Both knockdown of Crz and acute injections of Crz peptide impact desiccation tolerance and recovery from chill-coma. Mapping of the Crz receptor (CrzR) expression identified three pairs of Capa-expressing neurons (Va neurons) in the ventral nerve cord that mediate these effects of Crz. We show that Crz acts to restore water/ion homeostasis by inhibiting release of CAPA neuropeptides via inhibition of cAMP production in Va neurons. Knockdown of CrzR in Va neurons affects CAPA signaling, and consequently increases tolerance for desiccation, ionic stress and starvation, but delays chill-coma recovery. Optogenetic activation of Va neurons stimulates excretion and simultaneous activation of Crz and CAPA-expressing neurons reduces this response, supporting the inhibitory action of Crz. Thus, Crz inhibits Va neurons to maintain osmotic and ionic homeostasis, which in turn affects stress tolerance. Earlier work demonstrated that systemic Crz signaling restores nutrient levels by promoting food search and feeding. Here we additionally propose that Crz signaling also ensures osmotic homeostasis by inhibiting release of CAPA neuropeptides and suppressing diuresis. Thus, Crz ameliorates stress-associated physiology through systemic modulation of both peptidergic neurosecretory cells and the fat body in Drosophila.