Dietary composition affects food preference in animals. High sugar intake suppresses sweet sensation from insects to humans, but the molecular basis of this suppression is largely unknown. Here, we reveal that sugar intake in Drosophila induces the gut to express and secrete Hedgehog (Hh) into the circulation. We show that the midgut secreted Hh localize to taste sensilla and suppresses sweet sensation, perception, and preference. We further find that the midgut Hh inhibits Hh signalling in the sweet taste neurons. Our electrophysiology studies demonstrate that the midgut Hh signal also suppresses bitter taste and some odour responses, affecting overall food perception and preference. We further show that the level of sugar intake during a critical window early in life, sets the adult gut Hh expression and sugar perception. Our results together reveal a bottom-up feedback mechanism involving a “gut-taste neuron axis” that regulates food sensation and preference. © 2022, The Author(s).