For spatial orientation, heading information can be processed in two different frames of reference, a self-centered egocentric or a viewpoint allocentric frame of reference. Using the most efficient frame of reference is in particular important if an animal migrates over large distances, as it the case for the monarch butterfly (Danaus plexippus). These butterflies employ a sun compass to travel over more than 4,000 kilometers to their destination in central Mexico. We developed tetrode recordings from the heading-direction network of tethered flying monarch butterflies that were allowed to orient with respect to a sun stimulus. We show that the neurons switch their frame of reference depending on the animal’s locomotion state. In quiescence, the heading-direction cells encode a sun bearing in an egocentric reference frame, while during active flight, the heading-direction is encoded within an allocentric reference frame. By switching to an allocentric frame of reference during flight, monarch butterflies convert the sun to a global compass cue for long-distance navigation, an ideal strategy for maintaining a migratory heading.