Glia from many diverse organisms play a number of important roles during the development of the nervous system. Therefore, knowing the molecules that control glial cell function will further our understanding of the mechanisms that control nervous system development. We have isolated a novel gene in Drosophila melanogaster that is expressed in a subset of the peripheral glia. We call this gene "Fire exit" (Fie), as the glia that express this gene do so during a time when they mark the entry and exit point of axons at the CNS/PNS boundary. This subset of peripheral glia act as intermediate targets during pathfinding and migration of the sensory axons in particular. Fire exit has been cloned and found to encode a novel transmembrane protein. Fire exit belongs to a group of proteins identified in the Drosophila melanogaster and Anopheles gambiae databases which contain four predicted transmembrane domains and a shared intracellular motif. Mutations that remove the fire exit protein have no obvious disruption to glial function. On the other hand, glia expressing the Fire exit gene bridge the transition zone between CNS and PNS and play a role in sensory axon guidance. Therefore, it appears that, while the glia that express this protein mediate axon guidance, Fire exit itself plays a nonessential part in this function. A role for Fire exit in glial development may be suggested by its evolutionary relationship to a family of lysosome-associated proteins called LAPTMs and suggests that Fire exit may function in intracellular transport during glial development.