The dendrites of neurons undergo dramatic reorganization in response to developmental and other cues, such as stress and hormones. Although their morphogenesis is an active area of research, there are few neuron preparations that allow the mechanistic study of how dendritic fields are established in central neurons. Dendritic refinement is a key final step of neuronal circuit formation and is closely linked to emergence of function. Here, we study a central serotonergic neuron in the Drosophila brain, the dendrites of which undergo a dramatic morphological change during metamorphosis. Using tools to manipulate gene expression in this neuron, we examine the refinement of dendrites during pupal life. We show that the final pattern emerges after an initial growth phase, in which the dendrites function as ‘detectors’, sensing inputs received by the cell. Consistent with this, reducing excitability of the cell through hyperpolarization by expression of Kir2.1 results in increased dendritic length. We show that sensory input, possibly acting through NMDA receptors, is necessary for dendritic refinement. Our results indicate that activity triggers Wnt signaling, which plays a ‘pro-retraction’ role in sculpting the dendritic field: in the absence of sensory input, dendritic arbors do not retract, a phenotype that can be rescued by activating Wnt signaling. Our findings integrate sensory activity, NMDA receptors and Wingless/Wnt5 signaling pathways to advance our understanding of how dendritic refinement is established. We show how the maturation of sensory function interacts with broadly distributed signaling molecules, resulting in their localized action in the refinement of dendritic arbors.