Adult neurogenesis has been linked to several cognitive functions and neurological disorders. Description of adult neurogenesis in a model organism like Drosophila could facilitate the genetic study of normal and abnormal neurogenesis in the adult brain. So far, formation of new neurons has not been detected in adult fly brains and hence has been thought to be absent in Drosophila. Here, we used an improved lineage-labeling method to show that, surprisingly, adult neurogenesis occurs in the medulla cortex of the Drosophila optic lobes. We also find that acute brain damage to this region stimulates adult neurogenesis. Finally, we identify a factor induced by acute damage, which is sufficient to specifically activate the proliferation of a cell type with adult neuroblast characteristics. Our results reveal unexpected plasticity in the adult Drosophila brain and describe a unique model for the genetic analysis of adult neurogenesis, plasticity, and brain regeneration.