The Drosophila IMP-L2 gene was identified as a 20-hydroxyecdysone-induced gene encoding a membrane-bound polysomal transcript. IMP-L2 is an apparent secreted member of the immunoglobulin superfamily. We have used deficiencies that remove the IMP-L2 gene to demonstrate that IMP-L2 is essential in Drosophila. The viability of IMP-L2 null zygotes is influenced by maternal IMP-L2. IMP-L2 null progeny from IMP-L2+ mothers exhibit a semilethal phenotype. IMP-L2 null progeny from IMP-L2 null mothers are 100% lethal. An IMP-L2 transgene completely suppresses the zygotic lethal phenotype and partially suppresses the lethality of IMP-L2 null progeny from IMP-L2 null mothers. In embryos, IMP-L2 mRNA is first expressed at the cellular blastoderm stage and continues to be expressed through subsequent development. IMP-L2 mRNA is detected in several sites including the ventral neuroectoderm, the tracheal pits, the pharynx and esophagus, and specific neuronal cell bodies. Staining of whole-mount embryos with anti-IMP-L2 antibodies shows that IMP-L2 protein is localized to specific neuronal structures late in embryogenesis. Expression of IMP-L2 protein in neuronal cells suggests a role in the normal development of the nervous system but no severe morphological abnormalities have been detected in IMP-L2 null embryos.