Stem cells proliferate through symmetric division or self-renew through asymmetric division whilst generating differentiating cell types. The balance between symmetric and asymmetric division requires tight control to either expand a stem cell pool or to generate cell diversity. In the Drosophila optic lobe, symmetrically dividing neuroepithelial cells transform into asymmetrically dividing neuroblasts. The switch from neuroepithelial cells to neuroblasts is triggered by a proneural wave that sweeps across the neuroepithelium. Here we review recent findings showing that the orchestrated action of the Notch, EGFR, Fat-Hippo, and JAK/STAT signalling pathways controls the progression of the proneural wave and the sequential transition from symmetric to asymmetric division. The neuroepithelial to neuroblast transition in the optic lobe bears many similarities to the switch from neuroepithelial cell to radial glial cell in the developing mammalian cerebral cortex. The Notch signalling pathway has a similar role in the transition from proliferating to differentiating stem cell pools in the developing vertebrate retina and in the neural tube. Therefore, findings in the Drosophila optic lobe provide insights into the transitions between proliferative and differentiative division in the stem cell pools of higher organisms.