Inositol depletion has been associated with diabetes and related complications. Increased inositol catabolism, via myo-inositol oxygenase (MIOX), has been implicated in decreased renal function. This study demonstrates that the fruit fly Drosophila melanogaster catabolizes myo-inositol via MIOX. The levels of mRNA encoding MIOX and MIOX specific activity are increased when fruit flies are grown on a diet with inositol as the sole sugar. Inositol as the sole dietary sugar can support D. melanogaster survival, indicating that there is sufficient catabolism for basic energy requirements, allowing for adaptation to various environments. The elimination of MIOX activity, via a piggyBac WH-element inserted into the MIOX gene, results in developmental defects including pupal lethality and pharate flies without proboscises. In contrast, RNAi strains with reduced levels of mRNA encoding MIOX and reduced MIOX specific activity develop to become phenotypically wild-type-appearing adult flies. myo-Inositol levels in larval tissues are highest in the strain with this most extreme loss of myo-inositol catabolism. Larval tissues from the RNAi strains have inositol levels higher than wild-type larval tissues but lower levels than the piggyBac WH-element insertion strain. myo-Inositol supplementation of the diet further increases the myo-inositol levels in the larval tissues of all the strains, without any noticeable effects on development. Obesity and blood (hemolymph) glucose, two hallmarks of diabetes, were reduced in the RNAi strains and further reduced in the piggyBac WH-element insertion strain. Collectively, these data suggest that moderately increased myo-inositol levels do not cause developmental defects and directly correspond to reduced larval obesity and blood (hemolymph) glucose.