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As in mammals, blood cells in Drosophila are derived from a common multipotent hematopoietic precursor population. In the embryo, these precursors are derived from the head mesoderm, whereas larval hematopoietic precursors are found in a specialized organ called the lymph gland. This shift in location of hematopoietic differentiation is reminiscent of similar events that occur during mammalian development. Recent analysis has identified several transcriptional regulators in Drosophila that influence hematopoietic lineage commitment. Interestingly, many of these factors are similar to factors directing mammalian hematopoietic differentiation. Although Drosophila blood cells are much less varied in terms of specific lineages, it would appear that many mechanistic aspects by which hematopoietic cell fate is determined have been conserved between Drosophila and mammals. Herein, we describe the Drosophila blood cell types, their physical origin, and the transcriptional regulators that govern this process.