Correct scaling of body and organ size is crucial for proper development and survival of all organisms. Perturbations in circulating hormones, including insulins and steroids, are largely responsible for changing body size in response to both genetic and environmental factors. Such perturbations typically produce adults whose organs and appendages scale proportionately with final size. The identity of additional factors that might contribute to scaling of organs and appendages with body size is unknown. Here we report that loss-of-function mutations in Drosophila Activinβ (Actβ), a member of the TGF-β superfamily, lead to production of small larvae/pupae and undersized rare adult escapers. Morphometric measurements of escaper adult appendage size (wings, legs), as well as heads, thoraxes, and abdomens, reveal a disproportional reduction in abdominal size compared to other tissues. Similar size measurements of selected Actβ mutant larval tissues demonstrate that somatic muscle size is disproportionately smaller when compared to fat body, salivary glands, prothoracic glands, imaginal discs and brain. We also show that Actβ control of body size is dependent on canonical signaling through the transcription-factor dSmad2 and that it modulates the growth rate, but not feeding behavior, during the third instar period. Tissue and cell-specific knockdown and overexpression studies reveal that motoneuron derived Actβ is essential for regulating proper body size and tissue scaling. These studies suggest that, unlike in vertebrates where Myostatin, and certain other Activin-like factors act as systemic negative regulators of muscle mass, in Drosophila Actβ is a positive regulator of muscle mass that is directly delivered to muscles by motoneurons. We discuss the importance of these findings in coordinating proportional scaling of insect muscle mass to appendage size.