When two socially naive Drosophila males meet, they will fight. However, prior social grouping of males reduces their aggression. We found olfactory communication to be important for modulating Drosophila aggression. Although acute exposure to the male-specific pheromone 11-cis-vaccenyl acetate (cVA) elicited aggression through Or67d olfactory receptor neurons (ORNs), chronic cVA exposure reduced aggression through Or65a ORNs. Or65a ORNs were not acutely involved in aggression, but blockade of synaptic transmission of Or65a ORNs during social grouping or prior chronic cVA exposure eliminated social modulation of aggression. Artificial activation of Or65a ORNs by ectopic expression of the Drosophila gene TrpA1 was sufficient to reduce aggression. Social suppression of aggression requires subsets of local interneurons in the antennal lobe. Our results indicate that activation of Or65a ORNs is important for social modulation of male aggression, demonstrate that the acute and chronic effects of a single pheromone are mediated by two distinct types of ORNs, reveal a behaviorally important role for interneurons and suggest a chemical method to reduce aggression in animals.