In Caenorhabditis elegans, insulin/insulin-like growth factor (IGF)-1 signaling (IIS) is an important pathway that controls larval diapause and adult lifespan. The IIS pathway is modulated by many insulin-like peptides (ILPs) through the DAF-2 receptor, the sole insulin/IGF-1 receptor-like protein in C. elegans. We previously identified the ILP, INS-18, and predicted its tertiary structure to be similar to the crystal structures of human insulin and IGF-1. In this study, the physiological function of INS-18 was first examined by gene disruption and overexpression, and we identified INS-18 as a DAF-2 antagonist required for larval diapause and longevity. Analysis of the INS-18 expression pattern using a reporter gene showed it to be expressed in nerve cells, including hermaphrodite-specific neurons (HSNs) at the adult stage. Other ILP expressions have not been previously observed in HSNs, and we believe that INS-18 expression in these cells may contribute to longevity by regulating reproduction. Loss of the DAF-16 transcription factor located downstream of the IIS pathway completely blocked ins-18 expression. We propose a positive feedback model for the regulation of ins-18 expression in which an antagonist binding to the DAF-2 receptor increases ins-18 gene expression, thus leading to increased INS-18 protein levels and increased DAF-2 receptor binding. Thus, this study provides a new insight into the hormonal regulation of insulin, an important and widespread process in the animal kingdom.