Two major classes of cells observed within the Drosophila hematopoietic repertoire are plasmatocytes/macrophages and crystal cells. The transcription factor Lz (Lozenge), which resembles human AML1 (acute myeloid leukemia-1) protein, is necessary for the development of crystal cells during embryonic and larval hematopoiesis. Another transcription factor, Gcm (glial cells missing), has previously been shown to be required for plasmatocyte development. Misexpression of Gcm causes crystal cells to be transformed into plasmatocytes. The Drosophila GATA protein Srp (Serpent) is required for both Lz and Gcm expression and is necessary for the development of both classes of hemocytes, whereas Lz and Gcm are required in a lineage-specific manner. Given the similarities of Srp and Lz to; mammalian GATA and AML1 proteins, observations in Drosophila are Likely to have broad implications for understanding mammalian hematopoiesis and leukemias.