The identification and validation of gene-gene interactions is a major challenge in human studies. Here, we explore an approach for studying epistasis in humans using a Drosophila melanogaster model of neonatal diabetes mellitus. Expression of the mutant preproinsulin (hINS(C96Y)) in the eye imaginal disc mimics the human disease: it activates conserved stress-response pathways and leads to cell death (reduction in eye area). Dominant-acting variants in wild-derived inbred lines from the Drosophila Genetics Reference Panel produce a continuous, highly heritable distribution of eye-degeneration phenotypes in a hINS(C96Y) background. A genome-wide association study (GWAS) in 154 sequenced lines identified a sharp peak on chromosome 3L, which mapped to a 400-bp linkage block within an intron of the gene sulfateless (sfl). RNAi knockdown of sfl enhanced the eye-degeneration phenotype in a mutant-hINS-dependent manner. RNAi against two additional genes in the heparan sulfate (HS) biosynthetic pathway (ttv and botv), in which sfl acts, also modified the eye phenotype in a hINS(C96Y)-dependent manner, strongly suggesting a novel link between HS-modified proteins and cellular responses to misfolded proteins. Finally, we evaluated allele-specific expression difference between the two major sfl-intronic haplotypes in heterozygtes. The results showed significant heterogeneity in marker-associated gene expression, thereby leaving the causal mutation(s) and its mechanism unidentified. In conclusion, the ability to create a model of human genetic disease, map a QTL by GWAS to a specific gene, and validate its contribution to disease with available genetic resources and the potential to experimentally link the variant to a molecular mechanism demonstrate the many advantages Drosophila holds in determining the genetic underpinnings of human disease.