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