Sox domain genes encode a family of developmentally important transcription factors conserved throughout the Metazoa. The subgroup B, which includes the mammalian Sox1, 2 and 3 proteins and their Drosophila counterparts Dichaete and SoxNeuro, are particularly important for the development of the nervous system where they appear to play conserved roles in neuronal specification and differentiation. Despite years of detailed study we still have a relatively poor idea of how Sox proteins function on a genome wide scale and the aim of my PhD work was to explore this aspect using the fly group B protein, Dichaete. A number of studies have shown that Dichaete performs a variety of critical functions during development and a few individual regulatory targets have been defined, however, at the start of my work no genome-wide data on Dichaete action were available. While such data emerged from large scale initiatives during my work, a systematic analysis of Dichaete action was lacking. Here I describe the first detailed genomic analysis of Dichaete activity, with a particular focus on three areas: finding the locations of Dichaete binding in the genome, a prediction of potential Dichaete cofactors and an analysis of Dichaete effects on gene expression. To address the issue of where Dichaete binds in the genome, I generated whole genome DamID data for embryos and followed this with a detailed comparative analysis, combining my data with three newly published ChIP-chip datasets. The combined studies identify thousands of binding regions, mostly in the vicinity of developmentally important genes. The binding profiles were found to be consistent with Dichaete acting on enhancer regions and also suggest a role in facilitating RNA Polymerase II pausing. The analysis also identified a Dichaete binding motif closely matching that found with in vitro studies. By combined ChIP and DamID datasets I generated a very high confidence core Dichaete binding dataset, which should be of considerable use in future studies. To identify potential Dichaete cofactors, I compiled the available embryonic transcription factor binding data from the Berkeley Drosophila Transcription Network and mod- ENCODE projects, and identified significant overlaps with the core Dichaete binding data. A number of the proteins highlighted in this analysis have known roles during neuroblast development, including Hunchback and Krüppel, transcription factors involved in temporal specification of neuroblast division, and Prospero, which plays a key role in neuroblast differentiation. The analysis suggests that Dichaete has a role during early neuroblast divisions, where it likely interacts with Hb and Kr to maintain neuroblast pluripotency. This is a role consistent with previous studies in Drosophila larval neuroblasts and is analogous to neural functions of Sox2 in mammals. My analysis suggests that Dichaete acts on the same target genes as Prospero but in an antagonistic role, with Dichaete preventing stem cell differentiation and Prospero promoting it. To examine the effects of Dichaete on gene expression, a number of microarray transcript profiling studies were performed, including a global study with Dichaete null mutants, and tissue specific studies in the CNS midline and neuroblasts via the use of dominant negative constructs. Whole transcriptome expression profiling data was combined with the binding data to establish a set of high confidence potential Dichaete targets, both for specific tissues and more globally during neurogenesis. Specific high confidence targets were found, including bancal during nervous system development. It was also concluded that Dichaete is likely to prevent cell cycle exit by repressing the apoptosis genes grim, hid and reaper, as well as the differentiation genes prospero and miranda. An extensive list of potential Dichaete direct targets was generated and can be used for validation and future research.