Notch signaling is involved in cell differentiation and patterning, as well as in the regulation of growth and cell survival. Notch activation at the dorsal-ventral boundary of the Drosophila eye-head primordium leads to the expression of the secreted protein Unpaired, a ligand of the JAK-STAT pathway that induces cell proliferation in the undifferentiated tissue. The zinc finger proteins encoded by elbow and no ocelli are expressed in the highly proliferative region of the eye-head primordium. Loss of elbow and no ocelli activities induces overgrowths of the head capsule, without inducing Upd expression de novo. These overgrowths depend on Notch activity suggesting that elbow and noc repress a Upd independent role of Notch in driving cell proliferation. When the size of the overgrown tissue is increased, ectopic antenna and eye structures can be found. Thus, tight regulation of the size of the eye-head primordium by elbow and no ocelli is crucial for proper fate specification and generation of the adult structures.