ABSTRACT Neurogenesis in Drosophila melanogaster starts by an ordered appearance of neuroblasts arranged in three columns (medial, intermediate and lateral) in each side of the neuroectoderm. Here we show that, in the intermediate column, the receptor tyrosine kinase DER represses expression of proneural genes, achaete and scute, and is required for the formation of neuroblasts. Most of the early function of DER is likely to be mediated by the Ras-MAP kinase signaling pathway, which is activated in the intermediate column, since a loss of a component of this pathway leads to a phenotype identical to that in DER mutants. MAP-kinase activation was also observed in the medial column where esg and proneural gene expression is unaffected by DER. We found that the homeobox gene vnd is required for the expression of esg and scute in the medial column, and show that vnd acts through the negative regulatory region of the esg enhancer that mediates the DER signal, suggesting the role of vnd is to counteract DER-dependent repression. Thus nested expression of vnd and the DER activator rhomboid is crucial to subdivide the neuroectoderm into the three dorsoventral domains.