A monolayer of perineurial cells overlies glia and neurons, and this stratum of the central nervous system is the principal site of the Drosophila (Diptera: Drosophilidae) blood-brain barrier. Perineurial cells are bonded together by pleated-sheet septate junctions that are the anatomical correlate of the vertebrate tight junction. The blood-brain barrier maintains the ionic homeostasis necessary for proper nerve function. It was known that a functioning blood-brain barrier is present in mature (Stage 17) Drosophila embryos, but the genesis of this barrier was not known. We surveyed the central nervous system of late stage embryos (15 through 17) to determine when perineurial cells could first be detected. These cells take their place in ton) the central nervous system and are joined together by pleated-sheet septate junctions, during Stage 17. Those septate junctions are quickly occlusive to lanthanum tracer. This development step occurs during the same time as when chemical synapses first become functional. Such concurrent maturation is far From coincidental, because partitioning nerves and their synapses from hemolymph (with its variable ionic constitution) are essential for normal electrophysiology. We discuss details of the germ line derivation of perineurial cells, their first detection in the embryonic central nervous system, their functional properties, and the polygonal cell-packing pattern seen in the larval central nervous system. (C) 1998 Elsevier Science Ltd. All rights reserved.