The glial cells missing (gcm) gene in Drosophila encodes a novel nuclear protein that is transiently expressed early in the development of nearly all glia. In loss-of-function gcm mutant alleles, nearly all glia fail to differentiate, and, where we can follow them in the PNS, are transformed into neurons. In gain-of-function gcm conditions using transgenic constructs that drive ectopic gcm expression, many presumptive neurons are transformed into glia. Thus, gcm appears to function as a binary genetic switch for glia versus neurons. In the presence of gcm protein, presumptive neurons become glia, while in its absence, presumptive glia become neurons.