Glia comprise a conspicuous population of non-neuronal cells in vertebrate and invertebrate nervous systems. Drosophila serves as a favorable model to elucidate basic principles of glial biology in vivo. The Drosophila neuropil glia (NPG), subdivided into astrocyte-like (ALG) and ensheathing glia (EG), extend reticular processes which associate with synapses and sheath-like processes which surround neuropil compartments, respectively. In this paper we characterize the development of NPG throughout fly brain development. We find that differentiated neuropil glia of the larval brain originate as a cluster of precursors derived from embryonic progenitors located in the basal brain. These precursors undergo a characteristic migration to spread over the neuropil surface while specifying/differentiating into primary ALG and EG. Embryonically-derived primary NPG are large cells which are few in number, and occupy relatively stereotyped positions around the larval neuropil surface. During metamorphosis, primary NPG undergo cell death. Neuropil glia of the adult (secondary NPG) are derived from type II lineages during the postembryonic phase of neurogliogenesis. These secondary NPG are much smaller in size but greater in number than primary NPG. Lineage tracing reveals that both NPG subtypes derive from intermediate neural progenitors of multipotent type II lineages. Taken together, this study reveals previously uncharacterized dynamics of NPG development and provides a framework for future studies utilizing Drosophila glia as a model.