POU transcription factors participate in cell-identity decisions during nervous system development, yet little is known about the regulatory networks controlling their expression. We report all knownDrosophila POU genes require castor (cas) for correct CNS expression. drifter and I-POU depend oncas for full expression, whereas pdm-1 andpdm-2 are negatively regulated. cas encodes a zinc finger protein that shares DNA-binding specificity with anotherpdm repressor: the gap segmentation gene regulator Hunchback (Hb). Our studies reveal that the embryonic CNS contains sequentially generated neuroblast sublineages that can be distinguished by their expression of either Hb, Pdm-1, or Cas. Hb and Cas may directly silencepdm expression in early and late developing sublineages, given that pdm-1 cis-regulatory DNA contains ⩾32 Hb/Cas-binding sites and its enhancer(s) are ectopically activated in cas− neuroblasts. In addition, the targeted misexpression of Cas in all neuroblast lineages reduces Pdm-1 expression without altering Hb expression. By ensuring correct POU gene expression boundaries, hb and cas maintain temporal subdivisions in the cell-identity circuitry controlling CNS development.