Aerobic respiration is the fundamental process in which cells generate energy by consuming oxygen and producing carbon dioxide. Organisms elaborately check the levels of respiratory gases from both internal and external systems for survival. Here, we find a novel link in between the external CO2 sensing cascade and the Drosophila hematopoietic system. In the brain, CO2 receptor neuron directly interacts with a small subset of O2 sensing neurons that systemically modulate physiological status according to the respiratory gases. Loss of the CO2 receptor neuron triggers the O2 sensing neuron to lead a hypoxia-like stress through changes in neuropeptides. Changes in the neuropeptide stimulates Notch-mediated cell to cell interaction in the hematopoietic organ, which induces expansion of crystal cells, a hallmark of hypoxic blood. This study provides a mechanistic and novel paradigm for the sensory perceptions of the CO2 gases and their effects on the hematopoietic system that may be conserved in mammals.