Individual neurons adopt and maintain defined morphological and physiological phenotypes as a result of the expression of specific combinations of transcription factors. In particular, homeodomain-containing transcription factors play key roles in determining neuronal subtype identity in flies and vertebrates. dbx belongs to the highly divergent H2.0 family of homeobox genes. In vertebrates, Dbx1 and Dbx2 promote the development of a subset of interneurons, some of which help mediate left-right coordination of locomotor activity. Here, we identify and show that the single Drosophila ortholog of Dbx1/2 contributes to the development of specific subsets of interneurons via cross-repressive, lineage-specific interactions with the motoneuron-promoting factors eve and hb9 (exex). dbx is expressed primarily in interneurons of the embryonic, larval and adult central nervous system, and these interneurons tend to extend short axons and be GABAergic. Interestingly, many Dbx(+) interneurons share a sibling relationship with Eve(+) or Hb9(+) motoneurons. The non-overlapping expression of dbx and eve, or dbx and hb9, within pairs of sibling neurons is initially established as a result of Notch/Numb-mediated asymmetric divisions. Cross-repressive interactions between dbx and eve, and dbx and hb9, then help maintain the distinct expression profiles of these genes in their respective pairs of sibling neurons. Strict maintenance of the mutually exclusive expression of dbx relative to that of eve and hb9 in sibling neurons is crucial for proper neuronal specification, as misexpression of dbx in motoneurons dramatically hinders motor axon outgrowth.