In the antennal lobe (AL), the first olfactory relay of Drosophila, excitatory neurons are predominantly cholinergic. Ionotropic nicotinic receptors play a vital role in the effects of acetylcholine in the AL. However, the AL also has a high expression level of metabotropic muscarinic acetylcholine receptors type A (mAChRs-A). Nevertheless, the neurons expressing them and their role in the AL are unknown. Elucidating their function may reveal principles in olfactory modulation. Here, we show that mAChRs-A shape AL output and affect behavior. We localized mAChRs-A effects to a sub-population of GABAergic local neurons (iLNs), where they play a dual role: direct excitation of iLNs and stabilization of the synapse between receptor neurons and iLNs, which undergoes strong short-term depression. Our results reveal modulatory functions of the AL main excitatory neurotransmitter. Striking similarities to the mammalian olfactory system predict that mammalian glutamatergic metabotropic receptors could be associated with similar modulations.