Background: The grasshopper median neuroblast (MNB) is a multipotent progenitor cell; that produces neurons and midline glia in distinct temporal phases. The MNB generates pioneer neurons during its first few divisions, and then switches to production of midline glial precursors. After the glia have been produced, the MNB reverts to generating neurons. We have investigated the molecular mechanism underlying the transition from glia production back to neuron production in the MNB lineage. Results: We report evidence that this second transition in the MNB lineage is triggered by the activation of cAMP-dependent protein kinase (PKA). PKA is a heterodimer of a catalytic (PKA-C) and a cAMP-binding regulatory (R) subunit. The R subunit dissociates from PKA-C on binding cAMP, and free PKA-C then translocates into the nucleus. Nuclear localization of PKA-C can thus be used as an indicator of PKA activation within a cell. We have found that PKA-C is translocated into the nucleus at the time of the second switch in the MNB lineage. When PKA is prematurely activated in the MNB by microinjection of purified PKA-C, or by pharmacological agents that elevate intracellular cAMP levels, the glial-to-neuronal cell-fate switch takes place prematurely. Inhibition of PKA activity by microinjection of a peptide inhibitor, or by a non-hydrolyzable cAMP analog, blocks the glial-to-neuronal switch. Conclusions: Our results imply that elevation of cAMP in the MNB, and the resultant activation of PKA, is likely to be a trigger for the glial-to-neuronal cell-fate transition within the MNB lineage.