In Drosophila, blood development occurs in a specialized larval hematopoietic organ, the lymph gland (LG), within which stem-like hemocyte precursors or prohemocytes differentiate to multiple blood cell types. Here we show that components of the Wingless (Wg) signaling pathway are expressed in prohemocytes. Loss- and gain-of-function analysis indicates that canonical Wg signaling is required for maintenance of prohemocytes and negatively regulates their differentiation. Wg signals locally in a short-range fashion within different compartments of the LG. In addition, Wg signaling positively regulates the proliferation and maintenance of cells that function as a hematopoietic niche in Drosophila, the posterior signaling center (PSC), and in the proliferation of crystal cells. Our studies reveal a conserved function of Wg signaling in the maintenance of stem-like blood progenitors and reveal an involvement of this pathway in the regulation of hemocyte differentiation through its action in the hematopoietic niche.