ABSTRACT Phagocytic clearance of degenerating neurons is triggered by “eat-me” signals exposed on the neuronal surface. The conserved neuronal eat-me signal phosphatidylserine (PS) and the engulfment receptor Draper (Drpr) mediate phagocytosis of degenerating neurons in Drosophila . However, how PS is recognized by Drpr-expressing phagocytes in vivo remains poorly understood. Using multiple models of dendrite degeneration, we show that the Drosophila chemokine-like protein Orion can bind to PS and is responsible for detecting PS exposure on neurons; it is supplied cell-non-autonomously to coat PS-exposing dendrites and to mediate interactions between PS and Drpr, thus enabling phagocytosis. As a result, the accumulation of Orion on neurons and on phagocytes produces opposite outcomes by potentiating and suppressing phagocytosis, respectively. Moreover, the Orion dosage is a key determinant of the sensitivity of phagocytes to PS exposed on neurons. Lastly, mutagenesis analyses show that the sequence motifs shared between Orion and human immunomodulatory proteins are important for Orion function. Thus, our results uncover a missing link in PS-mediated phagocytosis in Drosophila and imply conserved mechanisms of phagocytosis of neurons. SIGNIFICANCE STATEMENT Phagocytes efficiently clear sick or damaged neuronal branches by engulfing them, while leaving healthy branches untouched. How phagocytes recognize degenerating neurites remains poorly understood. Here, we identified a key role for the secreted protein Orion in the detection and engulfment of degenerating neurites in Drosophila . Using multiple models of dendrite degeneration, we found that Orion acts as a bridging molecule between the neuronal “eat-me” signal phosphatidylserine and the engulfment receptor Draper on phagocytes, enabling phagocytosis. Our study reveals a missing link in phosphatidylserine-mediated phagocytosis in vivo , sheds light on factors determining the sensitivity of phagocytes, and implies the potential for manipulating the detection of neuronal “eat-me” signals in neurodegenerative diseases.