In the mammalian CNS, glial cells expressing excitatory amino acid transporters (EAATs) tightly regulate extracellular glutamate levels to control neurotransmission and protect neurons from excitotoxic damage. Dysregulated EAAT expression is associated with several CNS pathologies in humans, yet mechanisms of EAAT regulation and the importance of glutamate transport for CNS development and function in vivo remain incompletely understood. Drosophila is an advanced genetic model with only a single high-affinity glutamate transporter termed Eaat1. We found that Eaat1 expression in CNS glia is regulated by the glycosyltransferase Fringe, which promotes neuron-to-glia signaling through the Delta-Notch ligand-receptor pair during embryogenesis. We made Eaat1 loss-of-function mutations and found that homozygous larvae could not perform the rhythmic peristaltic contractions required for crawling. We found no evidence for excitotoxic cell death or overt defects in the development of neurons and glia, and the crawling defect could be induced by postembryonic inactivation of Eaat1. Eaat1 fully rescued locomotor activity when expressed in only a limited subpopulation of glial cells situated near potential glutamatergic synapses within the CNS neuropil. Eaat1 mutants had deficits in the frequency, amplitude, and kinetics of synaptic currents in motor neurons whose rhythmic patterns of activity may be regulated by glutamatergic neurotransmission among premotor interneurons; similar results were seen with pharmacological manipulations of glutamate transport. Our findings indicate that Eaat1 expression is promoted by Fringe-mediated neuron-glial communication during development and suggest that Eaat1 plays an essential role in regulating CNS neural circuits that control locomotion in Drosophila.