Despite their different origins, Drosophila glia and hemocytes are related cell populations that provide an immune function. Drosophila hemocytes patrol the body cavity and act as macrophages outside the nervous system, whereas glia originate from the neuroepithelium and provide the scavenger population of the nervous system. Drosophila glia are hence the functional orthologs of vertebrate microglia, even though the latter are cells of immune origin that subsequently move into the brain during development. Interestingly, the Drosophila immune cells within (glia) and outside (hemocytes) the nervous system require the same transcription factor glial cells deficient/glial cells missing (Glide/Gcm) for their development. This raises the issue of how do glia specifically differentiate in the nervous system, and hemocytes in the procephalic mesoderm. The Repo homeodomain transcription factor and panglial direct target of Glide/Gcm is known to ensure glial terminal differentiation. Here we show that Repo also takes center stage in the process that discriminates between glia and hemocytes. First, Repo expression is repressed in the hemocyte anlagen by mesoderm-specific factors. Second, Repo ectopic activation in the procephalic mesoderm is sufficient to repress the expression of hemocyte-specific genes. Third, the lack of Repo triggers the expression of hemocyte markers in glia. Thus, a complex network of tissue-specific cues biases the potential of Glide/Gcm. These data allow us to revise the concept of fate determinants and help us to understand the bases of cell specification. Both sexes were analyzed.SIGNIFICANCE STATEMENT Distinct cell types often require the same pioneer transcription factor, raising the issue of how one factor triggers different fates. In Drosophila, glia and hemocytes provide a scavenger activity within and outside the nervous system, respectively. While they both require the glial cells deficient/glial cells missing (Glide/Gcm) transcription factor, glia originate from the ectoderm, and hemocytes from the mesoderm. Here we show that tissue-specific factors inhibit the gliogenic potential of Glide/Gcm in the mesoderm by repressing the expression of the homeodomain protein Repo, a major glial-specific target of Glide/Gcm. Repo expression in turn inhibits the expression of hemocyte-specific genes in the nervous system. These cell-specific networks secure the establishment of the glial fate only in the nervous system and allow cell diversification.