Asymmetric cell divisions play a key role in establishing neuronal diversity in the mammalian and Drosophila CNS, but the mechanisms involved are mostly unknown. The Drosophila MP2 precursor divides asymmetrically to generate the dMP2/vMP2 interneurons. Delta-Notch signaling is required to specify vMP2 fate, whereas the localized determinant Numb is segregated into dMP2 and is required to specify dMP2 fate. Notch; numb double mutants have two dMP2 neurons; hence, Numb is not required for dMP2 fate, but antagonizes the Delta-Notch "vMP2" signal. In vivo Delta expression and in vitro culture experiments show that vMP2 fate is specified by an "inductive" signal from outside the MP2 lineage. Thus, intrinsic and extrinsic cues converge to specify binary cell fates in the MP2 cell lineage.