Studies in different animal model systems have revealed the impact of odors on immune cells; however, any understanding on why and how odors control cellular immunity remained unclear. We find that employ an olfactory-immune cross-talk to tune a specific cell type, the lamellocytes, from hematopoietic-progenitor cells. We show that neuronally released GABA derived upon olfactory stimulation is utilized by blood-progenitor cells as a metabolite and through its catabolism, these cells stabilize Sima/HIFα protein. Sima capacitates blood-progenitor cells with the ability to initiate lamellocyte differentiation. This systemic axis becomes relevant for larvae dwelling in wasp-infested environments where chances of infection are high. By co-opting the olfactory route, the preconditioned animals elevate their systemic GABA levels leading to the upregulation of blood-progenitor cell Sima expression. This elevates their immune-potential and primes them to respond rapidly when infected with parasitic wasps. The present work highlights the importance of the olfaction in immunity and shows how odor detection during animal development is utilized to establish a long-range axis in the control of blood-progenitor competency and immune-priming.