ABSTRACT The Drosophila ventral nerve cord derives from a stereotype population of about 30 neural stem cells, the neuroblasts, per hemineuromere. Previous experiments provided indications for inductive signals at ventral sites of the neuroectoderm that confer neuroblast identities. Using cell lineage analysis, molecular markers and cell transplantation, we show here that EGF receptor signalling plays an instructive role in CNS patterning and exerts differential effects on dorsoventral subpopulations of neuroblasts. The Drosophila EGF receptor (DER) is capable of cell autonomously specifiying medial and intermediate neuroblast cell fates. DER signalling appears to be most critical for proper development of intermediate neuroblasts and less important for medial neuroblasts. It is not required for lateral neuroblast lineages or for cells to adopt CNS midline cell fate. Thus, dorsoventral patterning of the CNS involves both DER-dependent and -independent regulatory pathways. Furthermore, we discuss the possibility that different phases of DER activation exist during neuroectodermal patterning with an early phase independent of midline-derived signals.