Beneficial microbe functions range from host dietary supplementation to development and maintenance of host immune system. In mammals, newborn progeny are quickly colonized with a symbiotic fauna that is provisioned in mother's milk and that closely resembles that of the parent. Tsetse fly (Diptera: Glossinidae) also depends on the obligate symbiont Wigglesworthia for nutritional supplementation, optimal fecundity, and immune system development. Tsetse progeny develop one at a time in an intrauterine environment and receive nourishment and symbionts in mother's milk. We show that the host Peptidoglycan Recognition Protein (PGRP-LB) is expressed only in adults and is a major component of the milk that nourishes the developing progeny. The amidase activity associated with PGRP-LB may scavenge the symbiotic peptidoglycan and prevent the induction of tsetse's Immune Deficiency pathway that otherwise can damage the symbionts. Reduction of PGRP-LB experimentally diminishes female fecundity and damages Wigglesworthia in the milk through induction of antimicrobial peptides, including Attacin. Larvae that receive less maternal PGRP-LB give rise to adults with fewer Wigglesworthia and hyperimmune responses. Such adults also suffer dysregulated immunity, as indicated by the presence of higher trypanosome densities in parasitized adults. We show that recPGRP-LB has antimicrobial and antitrypanosomal activities that may regulate symbiosis and impact immunity. Thus, PGRP-LB plays a pivotal role in tsetse's fitness by protecting symbiosis against host-inflicted damage during development and by controlling parasite infections in adults that can otherwise reduce host fecundity.