bHLH-O proteins are a subfamily of the basic-helix-loop-helix transcription factors characterized by an 'Orange' protein-protein interaction domain. Typical members are the Hairy/E(spl), or Hes, proteins, well studied in their ability, among others, to suppress neuronal differentiation in both invertebrates and vertebrates. Hes proteins are often effectors of Notch signalling. In vertebrates, another bHLH-O protein group, the Hey proteins, have also been shown to be Notch targets and to interact with Hes. We have studied the single Drosophila Hey orthologue. We show that it is primarily expressed in a subset of newly born neurons, which receive Notch signalling during their birth. Unlike in vertebrates, however, Hey is not expressed in precursor cells and does not block neuronal differentiation. It rather promotes one of two alternative fates that sibling neurons adopt at birth. Although in the majority of cases Hey is a Notch target, it is also expressed independently of Notch in some lineages, most notably the larval mushroom body. The availability of Hey as a Notch readout has allowed us to study Notch signalling during the genesis of secondary neurons in the larval central nervous system.