In Drosophila, the glial cells missing (gcm) gene encodes a transcription factor that controls the determination of glial versus neuronal fate. In gcm mutants, presumptive glial cells are transformed into neurons and, conversely, when gcm is ectopically misexpressed, presumptive neurons become glia. Although gcm is thought to initiate glial cell development through its action on downstream genes that execute the glial differentiation program, little is known about the identity of these genes. To identify gcm downstream genes in a comprehensive manner, we used genome-wide oligonucleotide arrays to analyze differential gene expression in wild-type embryos versus embryos in which gcm is misexpressed throughout the neuroectoderm. Transcripts were analyzed at two defined temporal windows during embryogenesis. During the first period of initial gcm action on determination of glial cell precursors, over 400 genes were differentially regulated. Among these are numerous genes that encode other transcription factors, which underscores the master regulatory role of gcm in gliogenesis. During a second later period, when glial cells had already differentiated, over 1200 genes were differentially regulated. Most of these genes, including many genes for chromatin remodeling factors and cell cycle regulators, were not differentially expressed at the early stage, indicating that the genetic control of glial fate determination is largely different from that involved in maintenance of differentiated cells. At both stages, glial-specific genes were upregulated and neuron-specific genes were downregulated, supporting a model whereby gcm promotes glial development by activating glial genes, while simultaneously repressing neuronal genes. In addition, at both stages, numerous genes that were not previously known to be involved in glial development were differentially regulated and, thus, identified as potential new downstream targets of gcm. For a subset of the differentially regulated genes, tissue-specific in vivo expression data were obtained that confirmed the transcript profiling results. This first genome-wide analysis of gene expression events downstream of a key developmental transcription factor presents a novel level of insight into the repertoire of genes that initiate and maintain cell fate choices in CNS development.