By database searches of the Drosophila genome project we have identified D-hil as the fly member of a novel family of W180-domain containing proteins. Immunocytochemistry demonstrated that D-hil is localized to the neuropil of the embryonic CNS, to the cellular cortex of dividing neuroblasts from larval brains, and that it is up-regulated in the cleavage furrow of S2 cells. We show that D-hil distribution overlaps extensively with that of the septin family member Pnut. Cross-immunoprecipitation experiments further indicated that the two proteins may be members of the same protein complex. Analysis of a severe hypomorphic P-element mutation in the D-hil locus suggested that D-hil is a nonessential protein. However, by creating double mutant flies we show that the D-hil locus acts as a modulator of Pnut function by increasing the level of polyploidy of neuroblasts in Pnut(KG00478)/Pnut(KG00478) larval brains. Based on these results we propose that D-hil may function as a regulator of septin function during cytokinesis in the developing nervous system.