Neural stem cells in Drosophila are currently one of the best model systems for understanding stem cell biology during normal development and during abnormal development of stem cell-derived brain tumors. In Drosophila brain development, the proliferative activity of neural stem cells called neuroblasts gives rise to both the optic lobe and the central brain ganglia, and asymmetric cell divisions are key features of this proliferation. The molecular mechanisms that underlie the asymmetric cell divisions by which these neuroblasts self-renew and generate lineages of differentiating progeny have been studied extensively and involve two major protein complexes, the apical complex which maintains polarity and controls spindle orientation and the basal complex which is comprised of cell fate determinants and their adaptors that are segregated into the differentiating daughter cells during mitosis. Recent molecular genetic work has established Drosophila neuroblasts as a model for neural stem cell-derived tumors in which perturbation of key molecular mechanisms that control neuroblast proliferation and the asymmetric segregation of cell fate determinants lead to brain tumor formation. Identification of novel candidate genes that control neuroblast self-renewal and differentiation as well as functional analysis of these genes in normal and tumorigenic conditions in a tissue-specific manner is now possible through genome-wide transgenic RNAi screens. These cellular and molecular findings in Drosophila are likely to provide valuable genetic links for analyzing mammalian neural stem cells and tumor biology.