Dorsoventral axis formation in the Drosophila wing depends on the activity of the selector gene apterous. Although selector genes are usually thought of as binary developmental switches, we find that Apterous activity is negatively regulated during wing development by its target gene dLMO. Apterous-dependent expression of Serrate and fringe in dorsal cells leads to the restricted activation of Notch along the dorsoventral compartment boundary. We present evidence that the ability of cells to participate in this Apterous-dependent cell-interaction is under spatial and temporal control. Apterous-dependent expression of dLMO causes downregulation of Serrate and fringe and allows expression of delta in dorsal cells. This limits the time window during which dorsoventral cell interactions can lead to localized activation of Notch and induction of the dorsoventral organizer. Overactivation of Apterous in the absence of dLMO leads to overexpression of Serrate, reduced expression of delta and concomitant defects in differentiation and cell survival in the wing primordium. Thus, downregulation of Apterous activity is needed to allow normal wing development.