In developing organs, the regulation of cell proliferation and patterning of cell fates is coordinated. How this coordination is achieved, however, is unknown. In the developing Drosophila wing, both cell proliferation and patterning require the secreted morphogen Wingless (Wg) at the dorsoventral compartment boundary. Late in wing development, Wg also induces a zone of non-proliferating cells at the dorsoventral boundary. This zone gives rise to sensory bristles of the adult wing margin. Here we investigate how Wg coordinates the cell cycle with patterning by studying the regulation of this growth arrest. We show that Wg, in conjunction with Notch, induces arrest in both the G1 and G2 phases of the cell cycle in separate subdomains of the zone of non-proliferating cells. Wg induces G2 arrest in two subdomains by inducing the proneural genes achaete and scute, which downregulate the mitosis-inducing phosphatase String (Cdc25). Notch activity creates a third domain by preventing arrest at G2 in wg-expressing cells, resulting in their arrest in G1.