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Abstract Glial cells are known to influence neuronal functions through glia–neuron communication. The present study aims to elucidate the mechanism behind peroxisome-mediated glia–neuron communication using Drosophila neuromuscular junction (NMJ) as a model system. We observe a high abundance of peroxisomes in the abdominal NMJ of adult Drosophila. Interestingly, glia-specific knockdown of peroxisome import receptor protein, Pex5, significantly increases axonal area and volume and leads to axon swelling. The enlarged axonal structure is likely deleterious, as the flies with glia-specific knockdown of Pex5 exhibit age-dependent locomotion defects. In addition, impaired peroxisomal ether lipid biosynthesis in glial cells also induces axon swelling. Consistent with our previous work, defective peroxisomal import function upregulates pro-inflammatory cytokine upd3 in glial cells, while glia-specific overexpression of upd3 induces axonal swelling. Furthermore, motor neuron-specific activation of the JAK-STAT pathway through hop overexpression results in axon swelling. Our findings demonstrated that impairment of glial peroxisomes alters axonal morphology, neuroinflammation, and motor neuron function.