Although all of the segmental ganglia of the grasshopper come from identical sets of embryonic precursor cells, there are striking differences in the number and properties of the neurons in the mature ganglia. In every segment, midline precursor 3 (MP3) divides once and gives rise to two progeny. We describe the fate of the two MP3 progeny in different segments. The morphology, physiology, and survival of the MP3 progeny depend upon their segmental position in the embryo. In the meso- and metathoracic segments (T2 and T3), one of the two progeny of MP3 transforms into the H cell. In many of the abdominal segments, beginning with the fourth (A4), both MP3 progeny die. A gradient of transformation and cell death is seen in the intervening first three abdominal segments (A1 to A3). From A1 to A3, the MP3 progeny acquire fewer of the morphological phenotypes of the H cell. This is paralleled by the partial acquisition of the physiological phenotypes of the H cell. Thus, cells that are the progeny of the same precursor cell in different segments can either live or die and, if they survive, can develop different morphological and physiological properties.