Insulin/IGF-1 signaling (IIS) modulates various physiological aspects, such as longevity, metabolism, development, reproduction, and behavior in multiple organisms. In Caenorhabditis elegans, mutations in
daf-2/insulin/IGF-1 receptor dramatically increase lifespan and resistance against various biotic and abiotic stresses. However,
daf-2 mutations generally impair fitness, including motility, feeding, development, and reproduction. Whether these pleiotropic effects of
daf-2 mutations can be dissociated from longevity at specific steps in IIS pathway remains poorly understood. Here we show that a specific hypomorphic allele of
daf-18/PTEN phosphatase retained longevity and enhanced pathogen resistance in
daf-2(
e1370) mutants without apparent fitness defects. Through an unbiased large-scale mutagenesis screen, we identified a missense mutation in
daf-18 [
daf-18(
yh1)], which suppressed constitutive dauer formation in
daf-2(
e1370) mutants with small impacts on resistance against Pseudomonas aeruginosa, PA14. We found that
daf-18(
yh1) maintained the long lifespan, enhanced immunity, and improved the reduced motility in
daf-2(
e1370) mutants. In contrast,
daf-18(
nr2037), a strong loss-of-function
daf-18 mutant allele affected all these phenotypes indiscriminately. Notably, we showed that
daf-18(
yh1) substantially reduced the lipid phosphatase activities of DAF-18/PTEN in vivo and in vitro, while retaining a partial protein phosphatase activity in vitro. Thus, the remaining protein phosphatase activity of DAF-18 in
daf-18(
yh1) appears to allow
daf-2 mutants to maintain longevity and health. Next, by performing unbiased RNA-sequencing analysis, we found that
daf-18(
yh1) and
daf-18(
nr2037) differentially affected the activities of two longevity-promoting transcription factors, DAF-16/FOXO3A and SKN-1/NRF2. Specifically,
daf-18(
yh1) retained the DAF-16 activity while suppressing the hyper-activation of SKN-1 in
daf-2(
e1370) mutants. We further showed that DAF-16 was required for the longevity and improved motility in
daf-2(
e1370);
daf-18(
yh1) animals, whereas hyper-activation of SKN-1 was detrimental to longevity and fitness. These data suggest that a proper calibration of DAF-16 and SKN-1 activities by modulating a single component in IIS, DAF-18 promotes healthy aging in animals with reduced IIS. Our study raises an intriguing possibility that DAF-18 serves as a therapeutic target for promoting healthy longevity without fitness defects.