The peripheral nervous system (PNS) of Drosophila offers a powerful system to precisely identify individual cells and dissect their genetic pathways of development. The mode of specification of a subset of larval PNS cells, the multiple dendritic (md) neurons (or type II neurons), is complex and still poorly understood. Within the dorsal thoracic and abdominal segments, two md neurons, dbd and dda1, apparently require the proneural gene amos but not atonal (ato) or Achaete-Scute-Complex (ASC) genes. ASC normally acts via the neural selector gene cut to specify appropriate sensory organ identities. Here, we show that dbd- and dda1-type differentiation is suppressed by cut in dorsal ASC-dependent md neurons. Thus, cut is not only required to promote an ASC-dependent mode of differentiation, but also represses an ASC- and ato-independent fate that leads to dbd and dda1 differentiation.