Cytoplasmic polyadenylation element binding (CPEB) proteins bind mRNAs to regulate their localization and translation. While the first CPEBs discovered were germline specific, subsequent studies indicate that CPEBs also function in many somatic tissues including the nervous system. Drosophila has two CPEB family members. One of these, orb, plays a key role in the establishment of polarity axes in the developing egg and early embryo, but has no known somatic functions or expression outside of the germline. Here we characterize the other Drosophila CPEB, orb2. Unlike orb, orb2 mRNA and protein are found throughout development in many different somatic tissues. While orb2 mRNA and protein of maternal origin are distributed uniformly in early embryos, this pattern changes as development proceeds and by midembryogenesis the highest levels are found in the CNS and PNS. In the embryonic CNS, Orb2 appears to be concentrated in cell bodies and mostly absent from the longitudinal and commissural axon tracts. In contrast, in the adult brain, the protein is seen in axonal and dendritic terminals. Lethal effects are observed for both RNAi knockdowns and orb2 mutant alleles while surviving adults display locomotion and behavioral defects. We also show that orb2 funtions in asymmetric division of stem cells and precursor cells during the development of the embryonic nervous system and mesoderm. C YTOPLASMIC polyadenylation element binding (CPEB) family proteins bind to target sequences in the 39-UTR of mRNAs and control their localization and translation. CPEB proteins function in many different biologocial contexts including oogenesis in Xenopus and Drosophila (Lantz et al. 1992(Lantz et al. , 1994Christerson and McKearin 1994;Hake and Richter 1994), synaptic plasticity in the rat hippocampus (Wu et al. 1998), and long-term memory in Aplysia . In Xenopus oocytes, CPEB regulates oocyte maturation. Prior to progesterone stimulation, it functions to repress target mRNAs in conjunction with proteins such as Maskin. After hormone stimulation, CPEB is phosphorylated, and the phosphorylated isoform recruits factors that stimulate poly(A) addition and translational activation of mRNAs that mediate the maturation process. In Drosophila, the CPEB protein Orb is required for oocyte determination and the establishment of the anterior-posterior and dorsal-ventral axes of the developing egg chamber. It functions by promoting the on-site translation of mRNAs that are localized in the developing oocyte, and like the Xenopus oocyte CPEB, its activity is regulated by phosphorylation.Most animals have two or more CPEB genes. Completed genome sequences reveal that humans, mice, and Caenorhabditis elegans have four CPEB genes, but only two CPEBs in Drosophila. The homology between the CPEB proteins is limited to the C-terminal half of the protein, which has two RNA-recognition motif (RRM) domains and a zinc finger domain, while the N-terminal half is highly divergent. Phylogenetic trees indicate that the CPEB genes fall into two differen...