In Drosophila, neurons and glial cells are produced by neural precursor cells 
called neuroblasts (NBs), which can be individually identified. Each NB 
generates a characteristic cell lineage specified by a precise spatiotemporal 
control of gene expression within the NB and its progeny. Here we show that the 
homeobox genes ladybird early and ladybird late are expressed in subsets of 
cells deriving from neuroblasts NB 5-3 and NB 5-6 and are essential for their 
correct development. Our analysis revealed that ladybird in Drosophila, like 
their vertebrate orthologous Lbx1 genes, play an important role in cell fate 
specification processes. Among those cells that express ladybird are NB 
5-6-derived glial cells. In ladybird loss-of-function mutants, the NB 
5-6-derived exit glial cells are absent while overexpression of these genes 
leads to supernumerary glial cells of this type. Furthermore, aberrant glial 
cell positioning and aberrant spacing of axonal fascicles in the nerve roots 
observed in embryos with altered ladybird function suggest that the ladybird 
genes might also control directed cell movements and cell-cell interactions 
within the developing Drosophila ventral nerve cord.