Spalt and disco define the dorsal-ventral neuroepithelial compartments of the developing Drosophila medulla.

Spatial patterning of neural stem cell populations is a powerful mechanism by which to generate neuronal diversity. In the developing Drosophila medulla, the symmetrically dividing neuroepithelial cells of the outer proliferation center crescent are spatially patterned by the nonoverlapping expression of 3 transcription factors: Vsx1 in the center, Optix in the adjacent arms, and Rx in the tips. These spatial genes compartmentalize the outer proliferation center and, together with the temporal patterning of neuroblasts, act to diversify medulla neuronal fates. The observation that the dorsal and ventral halves of the outer proliferation center also grow as distinct compartments, together with the fact that a subset of neuronal types is generated from only one half of the crescent, suggests that additional transcription factors spatially pattern the outer proliferation center along the dorsal-ventral axis. Here, we identify the spalt (salm and salr) and disco (disco and disco-r) genes as the dorsal-ventral patterning transcription factors of the outer proliferation center. Spalt and Disco are differentially expressed in the dorsal and ventral outer proliferation center from the embryo through to the third instar larva, where they cross-repress each other to form a sharp dorsal-ventral boundary. We show that hedgehog is necessary for Disco expression in the embryonic optic placode and that disco is subsequently required for the development of the ventral outer proliferation center and its neuronal progeny. We further demonstrate that this dorsal-ventral patterning axis acts independently of Vsx1-Optix-Rx and thus propose that Spalt and Disco represent a third outer proliferation center patterning axis that may act to further diversify medulla fates.