Drosophila atonal (ato) is the proneural gene of the chordotonal organs (CHOs) in the peripheral nervous system (PNS) and the larval and adult photoreceptor organs. Here, we show that ato is expressed at multiple stages during the development of a lineage of central brain neurons that innervate the optic lobes and are required for eclosion. A novel fate mapping approach shows that ato is expressed in the embryonic precursors of these neurons and that its expression is reactivated in third instar larvae (L3). In contrast to its function in the PNS, ato does not act as a proneural gene in the embryonic brain. Instead, ato performs a novel function, regulating arborization during larval and pupal development by interacting with Notch.