The counterregulatory response to hypoglycemia (CRR), which ensures a sufficient glucose supply to the brain, is an essential survival function. It is orchestrated by incompletely characterized glucose-sensing neurons, which trigger a coordinated autonomous and hormonal response that restores normoglycemia. Here, we investigate the role of hypothalamic Tmem117, identified in a genetic screen as a regulator of CRR. We show that Tmem117 is expressed in vasopressin magnocellular neurons of the hypothalamus. Tmem117 inactivation in these neurons increases hypoglycemia-induced vasopressin secretion leading to higher glucagon secretion in male mice, and this effect is estrus cycle phase dependent in female mice. Ex vivo electrophysiological analysis, in situ hybridization, and in vivo calcium imaging reveal that Tmem117 inactivation does not affect the glucose-sensing properties of vasopressin neurons but increases ER stress, ROS production, and intracellular calcium levels accompanied by increased vasopressin production and secretion. Thus, Tmem117 in vasopressin neurons is a physiological regulator of glucagon secretion, which highlights the role of these neurons in the coordinated response to hypoglycemia.