Feeding decisions are fundamental to survival, and decision making is often disrupted in disease, yet the neuronal and molecular mechanisms of adaptive decision making are not well understood. Here we show that the neural activity in a small population of neurons projecting to the fan-shaped body in the central brain of Drosophila represents food choice during sensory conflict. We found that hungry flies made tradeoffs between appetitive and aversive values of food in a decision making task to choose unpalatable bittersweet food with high sucrose concentration over sucrose-only food with less sucrose. Using cell-specific optogenetics and receptor RNAi knockdown during the decision task, we identified an upstream neuropeptidergic and dopaminergic network that likely relays internal state and other decision relevant information, like valence and previous experience, to the fan-shaped body. Importantly, calcium imaging revealed that these fan-shaped body neurons were strongly inhibited by rejected food choice, suggesting that this neural activity is a representation of behavioral choice. FB response to food choice is modulated by taste, previous experience, and hunger state, which the fan-shaped body neurons likely integrate to encode choice before relaying decision information to downstream motor circuits for behavioral implementation. Our results uncover a neural substrate for choice encoding in a genetically tractable model to enable mechanistic dissection of decision making at neuronal, cellular, and molecular levels.