The ability to reprogram differentiated cells into a pluripotent state has revealed that the differentiated state is plastic and reversible. It is evident, therefore, that mechanisms must be in place to maintain cells in a differentiated state. Transcription factors that specify neuronal characteristics have been well studied, but less is known about the mechanisms that prevent neurons from dedifferentiating to a multipotent, stem cell-like state. Here, we identify Lola as a transcription factor that is required to maintain neurons in a differentiated state. We show that Lola represses neural stem cell genes and cell-cycle genes in postmitotic neurons. In lola mutants, neurons dedifferentiate, turn on neural stem cell genes, and begin to divide, forming tumors. Thus, neurons rather than stem cells or intermediate progenitors are the tumor-initiating cells in lola mutants.