The pattern of the external sensory organs (SO) in Drosophila depends on the activity of the basic helix-loop-helix (bHLH) transcriptional activators Achaete/Scute (Ac/Sc) that are expressed in clusters of cells (pro-neural clusters) and provide the cells with the potential to develop a neural fate. In the mesothorax, the GATA1 transcription factor Pannier (Pnr), together with its cofactor Chip, activates ac/sc genes directly through binding to the dorso-central enhancer (DC) of ac/sc. We identify the LIM-homeo domain (LIM-HD) transcription factor Islet (Isl) by genetic screening and investigate its role in the thoracic pre-patterning. We show that isl loss-of-function mutations result in expanded Ac expression in DC and scutellar (SC) pro-neural clusters and formation of ectopic sensory organs. Overexpression of Isl decreases pro-neural expression and suppresses bristle development. Moreover, Isl is coexpressed with Pnr in the posterior region of the mesothorax. In the DC pro-neural cluster, Isl antagonizes Pnr activity both by dimerization with the DNA-binding domain of Pnr and via competitive inhibition of the Chip-bHLH interaction. We propose that sensory organ pre-patterning relies on the antagonistic activity of individual Chip-binding factors. The differential affinities of these binding-factors and their precise stoichiometry are crucial in specifying pre-patterns within the different pro-neural clusters.