As а model organism, the fruit fly (Drosophila melanogaster) has assumed a leading position in modern biological research. The Drosophila genetic system has a number of advantages making it a key model in investigating the molecular mechanisms of metazoan developmental processes. Over the past two decades, significant progress has been made in understanding the molecular mechanisms regulating Drosophila hematopoiesis. This review discusses the major advances in investigating the molecular mechanisms involved in maintaining the population of multipotent progenitor cells and their differentiation into mature hemocytes in the hematopoietic organ of the Drosophila larva. The use of the Drosophila hematopoietic organ as a model system for hematopoiesis has allowed to characterize the complex interactions between signaling pathways and transcription factors in regulating the maintenance and differentiation of progenitor cells through the signals from the hematopoietic niche, autocrine and paracrine signals, and the signals emanated by differentiated cells.