We describe a genetic mosaic system in Drosophila, in which a dominant repressor of a cell marker is placed in trans to a mutant gene of interest. Mitotic recombination events between homologous chromosomes generate homozygous mutant cells, which are exclusively labeled due to loss of the repressor. Using this system, we are able to visualize axonal projections and dendritic elaboration in large neuroblast clones and single neuron clones with a membrane-targeted GFP marker. This new method allows for the study of gene functions in neuroblast proliferation, axon guidance, and dendritic elaboration in the complex central nervous system. As an example, we show that the short stop gene is required in mushroom body neurons for the extension and guidance of their axons.