The ellipsoid body (EB) in the Drosophila brain is a central complex (CX) substructure that harbors circumferentially laminated ring (R) neuron axons and mediates multifaceted sensory integration and motor coordination functions. However, what regulates R axon lamination and how lamination affects R neuron function remain unknown. We show here that the EB is sequentially innervated by small-field and large-field neurons and that early developing EB neurons play an important regulatory role in EB laminae formation. The transmembrane proteins semaphorin-1a (Sema-1a) and plexin A function together to regulate R axon lamination. R neurons recruit both GABA and GABA-A receptors to their axon terminals in the EB, and optogenetic stimulation coupled with electrophysiological recordings show that Sema-1a-dependent R axon lamination is required for preventing the spread of synaptic inhibition between adjacent EB lamina. These results provide direct evidence that EB lamination is critical for local pre-synaptic inhibitory circuit organization.