In vertebrates, transcriptional regulators of the GATA family appear to have a conserved function in differentiation and organ development. GATA-1, −2 and −3 are required for different aspects of hematopoiesis, while GATA-4, −5 and −6 are expressed in various organs of endodermal origin, such as intestine and liver, and are implicated in endodermal differentiation. Here we report that the Drosophila gene serpent (srp) encodes the previously described GATA factor ABF. The multiple functions of srp in Drosophila suggest that it is an ortholog of the entire vertebrate Gata family. srp is required for the differentiation and morphogenesis of the endodermal gut. Here we show that it is also essential for Drosophila hematopoiesis and for the formation of the fat body, the insect organ analogous to the liver. These findings imply that some aspects of the molecular mechanisms underlying blood cell development as well as endodermal differentiation are early acquisitions of metazoan evolution and may be common to most higher animals.