During Drosophila embryonic CNS development, the sequential neuroblast (NB) expression of four proteins, Hunchback (Hb), Pou-homeodomain proteins 1 and 2 (referred to collectively as Pdm), and Castor (Cas), identifies a transcription factor network regulating the temporal development of all ganglia. The Zn-finger proteins Hb and Cas, acting as repressors, confine Pdm expression to a narrow intermediate temporal window; this results in the generation of three panneural domains whose cellular constituents are marked by expression of Hb, Pdm, or Cas (R. Kambadur et al., 1998, Genes Dev. 12, 246-260). Seeking to identify the cellular mechanisms that generate these expression compartments, we studied the lineage development of isolated NBs in culture. We found that the Hb, Pdm, and Cas expression domains are generated by transitions in NB gene expression that are followed by gene product perdurance within sequentially produced sublineages. Our results also indicate that following Cas expression, many CNS NBs continue their asymmetric divisions generating additional progeny, which can be identified by the expression of the bHLH transcription factor Grainyhead (Gh). Gh appears to be a terminal embryonic CNS lineage marker. Taken together, these studies indicate that once NBs initiate lineage development, no additional signaling between NBs and the neuroectoderm and/or mesoderm is required to trigger the temporal progression of Hb --> Pdm --> Cas --> Gh expression during NB outgrowth.