During development, neural progenitor cells or neuroblasts generate a great intra- and inter-segmental diversity of neuronal and glial cell types in the nervous system. In thoracic segments of the embryonic central nervous system of Drosophila, the neuroblast NB6-4t undergoes an asymmetric first division to generate a neuronal and a glial sublineage, while abdominal NB6-4a divides once symmetrically to generate only 2 glial cells. We had earlier reported a critical function for the G1 cyclin, CyclinE (CycE) in regulating asymmetric cell division in NB6-4t. Here we show that (i) this function of CycE is independent of its role in cell cycle regulation and (ii) the two functions are mediated by distinct domains at the protein level. Results presented here also suggest that CycE inhibits the function of Prospero and facilitates its cortical localization, which is critical for inducing stem cell behaviour, i.e. asymmetric cell division of NB6-4t. Furthermore our data imply that CycE is required for the maintenance of stem cell identity of most other neuroblasts.