We have found two novel lipocalins in the fruit fly Drosophila melanogaster that are homologous to the grasshopper Lazarillo, a singular lipocalin within this protein family which functions in axon guidance during nervous system development. Sequence analysis suggests that the two Drosophila proteins are secreted and possess peptide regions unique in the lipocalin family. The mRNAs of DNLaz (for Drosophila neural Lazarillo) and DGLaz (for Drosophila glial Lazarillo) are expressed with different temporal patterns during embryogenesis. They show low levels of larval expression and are highly expressed in pupa and adult flies. DNLaz mRNA is transcribed in a subset of neurons and neuronal precursors in the embryonic CNS. DGLaz mRNA is found in a subset of glial cells of the CNS: the longitudinal glia and the medial cell body glia. Both lipocalins are also expressed outside the nervous system in the developing gut, fat body and amnioserosa. The DNLaz protein is detected in a subset of axons in the developing CNS. Treatment with a secretion blocker enhances the antibody labeling, indicating the DNLaz secreted nature. These findings make the embryonic nervous system expression of lipocalins a feature more widespread than previously thought. We propose that DNLaz and DGLaz may have a role in axonal outgrowth and pathfinding, although other putative functions are also discussed.