Drosophila has emerged as an important model system in the examination of the hematopoietic process owing to the conserved nature of many of the transcription factors and signaling pathways utilized to produce blood cells. Mirroring vertebrate hematopoiesis, Drosophila generate hemocytes in a distinct spatial temporal course. The focus of the following study concerns the definitive wave of hematopoiesis, which occurs in the lymph gland (LG). Through microarray analysis, bag-of-marbles (bam) was found to be transcriptionally active in the LG. Furthermore, Bam was expressed in both the niche cells of the posterior signaling center (PSC) and the progenitors of the medullary zone (MZ). The progenitor cells of bam mutant LGs prematurely differentiate into all three hemocyte types. Additionally, the PSC number is dramatically increased and the cells are dispersed throughout the primary LG tissue. These two distinct phenotypes demonstrate that bam has cell-autonomous functions in these separate regions of the LG. In order to further define the function of bam, a sensitized third chromosome deficiency screen was conducted implementing one null copy of bam (bam∆86) and the lamellocyte specific enhancer reporter, MSNF9mcherry. Through continued screening, two genes were uncovered that displayed a bam-dependent lamellocyte suppression, Rab11 and qin. An additional three genes previously unknown to function in hematopoiesis were found to suppress lamellocyte differentiation in a bam-independent manner (msps, cct1, and ChaVAchT). Further investigation of the interaction between Bam and Qin revealed co-localization of the two proteins in early third instar LGs and a significant reduction of hematopoietic progenitors in LGs heterozygous for both bam∆86 and qine03728. Forced expression of the C-terminal domain of qin with a MZ-specific driver caused significant expansion of the MZ, similar to the full-length construct and was able to rescue the reduced LG and MZ size characteristic of qin mutants, highlighting the importance of the Tudor domains located in this fragment. Lastly, qin and bam may be functioning through an epigenetic mechanism as the nuclear localization of HP1a (Heterochromatin protein 1a) is altered in heterozygous mutant LGs. Together, these findings have provided important insights into the genetic control of hematopoietic progenitor fate in Drosophila.