ABSTRACTCoordinated animal locomotion depends on the development of functional proprioceptors. While early cell-fate determination processes are well characterized, little is known about the terminal differentiation of cells within the proprioceptive lineage and the genetic networks that control them. In this work we describe a gene regulatory network consisting of three transcription factors-Prospero (Pros), D-Pax2 and Delilah (Dei)-that dictates two alternative differentiation programs within the proprioceptive lineage in Drosophila. We show that D-Pax2 and Pros control the differentiation of cap versus scolopale cells in the chordotonal organ lineage by, respectively, activating and repressing the transcription ofdei.Normally, D-Pax2 activates the expression ofdeiin the cap cell but is unable to do so in the scolopale cell where Pros is co-expressed. We further show that D-Pax2 and Pros exert their effects ondeitranscription via a 262 bp chordotonal-specific enhancer in which two D-Pax2- and three Pros-binding sites were identified experimentally. When this enhancer was removed from the fly genome, the cap- and ligament-specific expression ofdeiwas lost, resulting in loss of chordotonal organ functionality and defective larval locomotion. Thus, coordinated larval locomotion depends on the activity of adeienhancer that integrates both activating and repressive inputs for the generation of a functional proprioceptive organ.