Carbon dioxide (CO2) is a key molecule in many biological processes; however, mechanisms by which organisms sense and respond to high CO2 levels remain largely unknown. Here we report that acute CO2 exposure leads to a rapid cessation in the contraction of the pharynx muscles in Caenorhabditis elegans. To uncover the molecular mechanisms underlying this response, we performed a forward genetic screen and found that hid-1, a key component in neuropeptide signaling, regulates this inhibition in muscle contraction. Surprisingly, we found that this hid-1-mediated pathway is independent of any previously known pathways controlling CO2 avoidance and oxygen sensing. In addition, animals with mutations in unc-31 and egl-21 (neuropeptide secretion and maturation components) show impaired inhibition of muscle contraction following acute exposure to high CO2 levels, in further support of our findings. Interestingly, the observed response in the pharynx muscle requires the BAG neurons, which also mediate CO2 avoidance. This novel hid-1-mediated pathway sheds new light on the physiological effects of high CO2 levels on animals at the organism-wide level.