The importance of reactive oxygen species (ROS) in myeloid cell development and function is well-established. However, a comprehensive understanding of metabolic states controlling ROS levels during hematopoiesis remains elusive. Myeloid-like blood progenitor cells of the Drosophila larvae reside in a specialized hematopoietic organ called the lymph gland. We find that these progenitors in homeostasis, utilize TCA to generate ROS. Excessive activation of TCA however raises ROS levels causing them to precociously differentiate and leads to retardation of lymph gland size. Thus, to maintain ROS homeostasis, progenitor cells utilize systemically derived GABA. GABA internalization and catabolism via inhibiting hydroxy prolyl hydroxylase (Hph) activity, promotes pyruvate dehydrogenase kinase enzyme activity (PDK). PDK controls inhibitory phosphorylation of pyruvate dehydrogenase (PDH), the rate-limiting enzyme, connecting pyruvate to TCA cycle and OXPHOS. Thus, by regulating PDK, GABA regulates progenitor TCA activity and ROS levels. In addition to this, GABA-catabolism/Hph axis via Hif/Sima drives a glycolytic state in progenitor cells. The dual control established by GABA on PDK and Sima maintains progenitor cell metabolism and sustains ROS homeostasis necessary for their development. Taken together, our study demonstrates the metabolic underpinnings of GABA in myeloid ROS regulation and their development, the relevance of which may be broadly conserved.