The proliferation of neural stem cells (NSCs) must be regulated precisely in order to generate a functional nervous system. Mis-regulated NSC division can lead to the inadequate production of differentiated progeny or to ectopic NSCs and tumour formation. As such, genes that promote the proliferative capacity of NSCs must be maintained in NSCs but down regulated in post-mitotic progeny. In vertebrates, the orphan nuclear receptor TLX (also known as nuclear receptor subfamily 2, group E, member 1 or NR2E1) is expressed in NSCs both during development and in adults. TLX mutations are linked to microcephaly and hereditary cases of bipolar disorder, whereas high TLX expression is a diagnostic marker of aggressive glioblastoma tumours and is correlated with poor patient prognosis. Despite the developmental and clinical importance of this gene, the molecular mechanisms through which it acts are not understood well. I have identified the Drosophila gene tailless (tll), the counterpart of TLX, as a key regulator of a subset of NSCs (known as type II) that divide in a manner analogous to mammalian NSCs. Human TLX and tll are highly conserved: the DNA binding domains share 81 % amino acid identity and conserved cofactors, such as Atrophin, mediate their activity as transcriptional repressors. During development, type II NSCs express Tll and divide to give rise to intermediate progenitors, which down-regulate Tll. In the absence of Tll, type II NSCs convert into a more restricted progenitor and are unable to generate full neuronal lineages. To identify the genes regulated by Tll in type II NSCs I used Targeted DamID to determine the genome-wide binding sites of Tll in vivo. My results showed that Tll binds to many of the genes required for type II NSC identity, suggesting that Tll is a master regulator of type II NSC fate. To test if the tumourigenic capacity of Tll/TLX was conserved in flies I expressed Tll or human TLX at high levels in the Drosophila brain, which resulted in large tumours consisting of type II NSCs. Through lineage analysis, I showed that Tll/TLX causes intermediate progenitors to revert to a NSC fate, thereby preventing differentiation and creating large tumours. This suggests that TLX and Tll act through conserved mechanisms to control NSC fate and implicates intermediate progenitors as the cell type of origin of TLX-induced tumours. Identifying the tumour-initiating cell for glioblastoma is vital for developing effective cell-type-specific treatments. Many distinct types of NSCs, which have different developmental and tumourigenic capacities, act in a coordinated manner to generate the Drosophila brain. The optic lobe neuroepithelium generates the NSCs that produce the adult visual system. The neuroepithelium is formed in the embryo but is not thought to generate NSCs until larval stages. I observed that many of the genes that regulate type II NSCs, such as tll, are also expressed in the optic lobe neuroepithelium. I identified that a marker of type II lineages (a regulatory fragment of the Fezf transcription factor earmuff) can also be used to follow the transition from neuroepithelium to NSCs in the optic lobe. Analysis of the division mode of the neuroepithelium (carried out in collaboration with Dr. Leo Otsuki) identified a new, embryonic phase of optic lobe NSC production. This finding shows that the neuroepithelium and NSCs co-exist throughout the majority of development and highlights the common genetic mechanisms that regulate different NSC populations.