Redox balance is crucial for normal development of stem and progenitor cells that reside in oxidative environments. In this study, we explore the mechanisms of redox homeostasis in such niches and show that myeloid-like blood progenitor cells of the Drosophila larval lymph gland, that generate reactive oxygen species (ROS), moderate it developmentally by de novo synthesizing glutathione (GSH) to ensure redox balance. During lymph gland development, as the blood-progenitor cells oxidize pyruvate via the TCA cycle leading to the generation of ROS, GABA-shunt restricts pyruvate dehydrogenase (PDH) activity and consequently TCA cycle flux. This moderation enables a metabolic rerouting of TCA-derived oxaloacetate (OAA) to pyruvate via gluconeogenesis, which is necessary to sustain serine levels, the rate-limiting precursor for de novo GSH synthesis. Disruption of GABA metabolism causes metabolic imbalance, marked by excessive PDH activity and heightened TCA cycle flux. This results in reduced OAA availability, impaired gluconeogenic capacity, and insufficient serine/GSH production, ultimately leading to ROS dysregulation. Overall, this study identifies a unique metabolic framework in blood progenitor cells, where the GABA shunt, by restraining PDH and TCA cycle activity, maintains ROS at developmental levels. By coupling TCA-derived metabolites to GSH production, this state enables the TCA cycle to support both ROS generation and ROS scavenging, ensuring the developmental roles of ROS while preserving progenitor homeostasis.