We establish that the jing zinc-finger transcription factor plays an essential role in controlling CNS midline and tracheal cell differentiation. jing transcripts and protein accumulate from stage 9 in the CNS midline, trachea and in segmental ectodermal stripes. JING protein localizes to the nuclei of CNS midline and tracheal cells implying a regulatory role during their development. Loss of jing-lacZ expression in homozygous sim mutants and induction of jing-lacZ by ectopic sim expression establish that jing is part of the CNS midline lineage. We have isolated embryonic recessive lethal jing mutations that display genetic interactions in the embryonic CNS midline and trachea, with mutations in the bHLH-PAS genes single-minded and trachealess, and their downstream target genes (slit and breathless). Loss- and gain-of-function jing is associated with defects in CNS axon and tracheal tubule patterning. In jing homozygous mutant embryos, reductions in marker gene expression and inappropriate apoptosis in the CNS midline and trachea establish that jing is essential for the proper differentiation and survival of these lineages. These results establish that jing is a key component of CNS midline and tracheal cell development. Given the similarities between JING and the vertebrate CCAAT-binding protein AEBP2, we propose that jing regulates transcriptional mechanisms in Drosophila embryos and promotes cellular differentiation in ectodermal derivatives.