The tumor suppressor genes lethal giant larvae (lgl) and discs large (dlg) act together to maintain the apical basal polarity of epithelial cells in the Drosophila embryo. Neuroblasts that delaminate from the embryonic epithelium require lgl to promote formation of a basal Numb and Prospero crescent, which will be asymmetrically segregated to the basal daughter cell upon division to specify cell fate. Sensory organ precursors (SOPs) also segregate Numb asymmetrically at cell division. Numb functions to inhibit Notch signaling and to specify the fates of progenies of the SOP that constitute the cellular components of the adult sensory organ. We report here that, in contrast to the embryonic neuroblast, lgl is not required for asymmetric localization of Numb in the dividing SOP. Nevertheless, mosaic analysis reveals that lgl is required for cell fate specification within the SOP lineage; SOPs lacking Lgl fail to specify internal neurons and glia. Epistasis studies suggest that Lgl acts to inhibit Notch signaling by functioning downstream or in parallel with Numb. These findings uncover a previously unknown function of Lgl in the inhibition of Notch and reveal different modes of action by which Lgl can influence cell fate in the neuroblast and SOP lineages.