The non-coding hsrω gene of Drosophila melanogaster is expressed in nearly all cell types and developmental stages. However, in the absence of conventional mutant alleles of this gene, its developmental functions remain largely unknown. In the present study, we used a variety of GAL4 drivers to overexpress or ablate this gene’s transcripts in specific tissues and examined the developmental consequences thereof. Our results show that a balanced expression of these non-coding transcripts is critical for survival and normal development in all the tissue types tested, since any change in cellular levels of these transcripts in a given cell type generally has detrimental effects, with extreme cases resulting in organismal lethality, although in a few cases the misexpression of these transcripts also suppresses the mutant phenotype due to other genetic conditions. Evidence is also presented for existence of a new spliced variant of the hsrω-n nuclear transcript. Following the RNAi-mediated down-regulation of hsrω transcripts, the omega speckles disappear so that the nucleoplasmic hnRNPs get diffusely distributed, while upregulation of these transcripts results in greater sequestration of these proteins into omega speckle clusters; either of these conditions would affect activities of the hnRNPs and other hsrω-RNA interacting proteins, which is likely to have cascading consequences. The present findings, together with our earlier observations on effects of altered levels of the hsrω transcripts on induced apoptosis and expanded polyQ-mediated neurodegeneration, further confirm that ncRNA species like the hsrω, far from being evolutionary hangovers, provide critical information for important functions in normal cells.