Recent evidence suggests that stochasticism is important for generating cell type diversity. We have identified a novel stochastic fate choice as part of the mechanism by which Delta/Notch (Dl/N) signaling specifies R7 fate in the Drosophila eye. The equivalence of R1/R6/R7 precursors is normally broken by the activation of N, which specifies the R7 fate. The orphan nuclear hormone receptor Seven-up (Svp) is necessary and sufficient to direct R1/R6/R7 precursors to adopt the R1/R6 fate. A simple model, therefore, is that N represses Svp, which otherwise prevents adoption of the R7 fate. However, we have found that R1/R6s lacking svp stochastically adopt either the R7 or the R8 fate with equal likelihood. We show that N specifies the R7 fate by a novel branched pathway: N represses Svp expression, thereby exposing an underlying stochastic choice between the R7 and R8 fates, and then tips this choice towards the R7 fate.