During development, transitions from proliferating, undifferentiated cells to quiescent, differentiated cells are tightly regulated to ensure that organs reach the correct size. Kenneth Irvine and colleagues now reveal that Fat-Hippo and Notch signalling influence this important transition during optic lobe development in Drosophila (see p. 2397). Like the vertebrate nervous system, the Drosophila optic lobe develops from neuroepithelial cells, which function as symmetrically dividing neural progenitors. The Fat-Hippo signalling pathway, which contains the large cadherin Fat and the serine/threonine kinase Hippo, regulates the transcription of cell proliferation and survival genes. The researchers report that neuroepithelial cells in the Drosophila optic lobe undergo a cell-cycle arrest that is regulated by Fat-Hippo signalling before converting to neuroblasts. They also identify a role for Notch signalling in committing neuroepithelial cells to become neuroblasts. These and other results suggest that, by arresting the cell cycle, Fat-Hippo signalling contributes to the accumulation of Delta, which modulates Notch signalling and triggers neuroepithelial differentiation. A similar mechanism might be involved in vertebrate neural development.