(A–B) show Upd3 expression ([A], green, n = 12) in a subset of PSC cells not earlier than 18 hr AEH, while (B) shows Wingless (Wg, red, n = 16) expression throughout first instar lymph gland. (C–C") shows another representative example of pMad enrichment in HSCs (N-GFP) (red, n = 6) (D) Quantitative analysis of effect of Dpp or Mad loss on HSCs, as seen by change in nuclear size. Nuclear size of first row of big cells near the DV decreases from 19.8 mm2 to 15.19 mm2 (n = 40 cells, p=5.46748E-19, two tailed unpaired Student’s t-test) in Mad loss and 14.78 mm2 (n = 40 cells, p=9.66379E-19, two tailed unpaired Student’s t-test) in Dpp loss from the HSC and PSC respectively. (E–G) Expressing dpp RNAi ([F], n = 12) in the niche or MadRNAi ([G], n = 15) in the HSC, during the critical window of late 16 of embryogenesis to 18 hr AEH, causes a drastic reduction in the size of the lymph gland but does not affect medullary-cortical zonation as seen by Cubitus Interruptus (Ci, Red) labeling, in comparison to the control in [E]. (H–I) show presence of medullary zone (Ci, Red, compare with [E])in hetero-allelic mutant combination of dpp (dppd12/dppd14 (n = 10; [H]) as well as Mad deficiency (mad12/mad1-2; n = 9; I]), although the size of the lymph gland is drastically reduced. (J) Analogous results are obtained in tkv7/tkv1 (Ci, Red, compare with [E]; n = 12). (K) shows wild type E(spl)mβ-CD2 expression as visualized by CD2 (red) staining in a third instar lg. (K'–K") shows that E(spl)mβ-CD2 expression overlaps with differentiating blood cell marker- Hemolectin (Hml; green).(L) shows that down-regulation of Mad from HSC during late embryo to 18 hr AEH has no effect on the E(spl)mβ-CD2 expression in the differentiated hemocytes of a late third instar lg (n = 6, compare with [K]). (M) Quantitative analysis of niche number in dpp loss (a short window of stage 16 of embryogenesis to 18 hr AEH) from the niche in 1st instar is comparable to control (p=0.856283596, n = 10, two tailed unpaired Student’s t-test) In contrast, classical loss of function genotype of dpp (dppd12/d14) revealed a significant increment in niche cell count when compared to wild-type (p=7.49838E-07, n = 10, two tailed unpaired Student’s t-test). Scale bar 5 μm (A–C") and 20 μm (E–L). Error Bars= S.D. Genotypes are shown on top of corresponding panels. DAPI marks the nucleus.