The embryonic neuroepithelium of Drosophila gives rise to the central nervous system. We have studied the mutant phenotype and expression of a gene, single-minded (sim), which is involved in generating a specific region of this neuroepithelium. In sim mutant embryos, a subset of neuronal and nonneuronal precursor cells lying along the midline fail to emerge with the rest of the neuroepithelium. We have identified the sim transcription unit and have shown by in situ hybridization to embryos that the sim gene is expressed specifically in the midline neuroepithelium. Both the mutant phenotype and the temporal and spatial expression of transcripts suggest that the sim gene plays a key role in the emergence of this subset of cells along the midline of the developing central nervous system.