In Drosophila, glial cell differentiation requires the expression of glial cells missing (gcm) in multiple neural cell lineages, where gcm acts as a binary switch for glial vs. neuronal fate. Thus, the primary event controlling gliogenesis in neural progenitors is the transcription of gcm. In addition, gcm is also required for the differentiation of macrophages, and is expressed in the hemocyte lineage. This dual role of gcm in glial cell and blood cell development underscores the need for the precise temporal and spatial regulation of gcm transcription. To understand how gcm transcription is regulated, we have undertaken an analysis of the cis-regulatory DNA elements of gcm using lacZ reporter activity in transgenic embryos, testing the activity of approximately 35 kilobases of DNA from the gcm locus. We have identified several distinct DNA regions that promote most of the elements of gcm expression. These include elements for general neural expression, gcm-independent and gcm-dependent glial-specific expression, as well as early and late hemocyte expression. We show that expression of an abdominal glial-specific element is dependent on the homeotic gene abdominal-A. Our results indicate that gcm transcription is controlled by a combination of general and lineage-specific elements, positive autoregulation, and neuronal repression.