We isolated and characterized the eagle gene, encoding a member of the steroid receptor superfamily in Drosophila. In the central nervous system eagle RNA was expressed in a limited number of cells. During stages 10 and 11, eagle RNA expression was observed in four neuroblasts, NB2-4, NB3-3, NB6-4 and NB7-3. Except for NB6-4, eagle RNA expression reached a maximum at the very beginning of expression or in the period of neuroblast delamination. Weak eagle RNA expression was also observed in a few putative progeny of NB7-3 during stages, late 11 and 12. All eagle RNA in abdominal segments disappeared at stage 13. Using an eagle-kinesin-lacZ fusion gene as a reporter, the division, migration, and axonogenesis in eagle-positive cells and their derivatives were examined. At stage 14, several types of neural or glial cells were detected which include EG and EW interneurons joining to the anterior and posterior commissures, respectively. Lack of eagle expression caused altered axonogenesis in an appreciable fraction of eagle-Kinesin-LacZ-positive neurons. Some EG cells failed to acquire the neural fate or underwent an extremely delayed differentiation, while EW neurons produced neurites in abnormal directions, suggesting that eagle may play a critical role in development of the progeny of eagle-positive neuroblasts.