Numerous roles for the Alk receptor tyrosine kinase have been described in Drosophila, including functions in the central nervous system (CNS), however the molecular details are poorly understood. To gain mechanistic insight, we employed Targeted DamID (TaDa) transcriptional profiling to identify targets of Alk signaling in the larval CNS. TaDa was employed in larval CNS tissues, while genetically manipulating Alk signaling output. The resulting TaDa data were analyzed together with larval CNS scRNA-seq datasets performed under similar conditions, identifying a role for Alk in the transcriptional regulation of neuroendocrine gene expression. Further integration with bulk and scRNA-seq datasets from larval brains in which Alk signaling was manipulated identified a previously uncharacterized Drosophila neuropeptide precursor encoded by CG4577 as an Alk signaling transcriptional target. CG4577, which we named Sparkly (Spar), is expressed in a subset of Alk-positive neuroendocrine cells in the developing larval CNS, including circadian clock neurons. In agreement with our TaDa analysis, overexpression of the Drosophila Alk ligand Jeb resulted in increased levels of Spar protein in the larval CNS. We show that Spar protein is expressed in circadian (clock) neurons, and flies lacking Spar exhibit defects in sleep and circadian activity control. In summary, we report a novel activity regulating neuropeptide precursor gene that is regulated by Alk signaling in the Drosophila CNS.