A variety of signaling pathways have been shown to regulate specification of neuronal subtype identity. However, the mechanisms by which future neurons simultaneously process information from multiple pathways to establish their identity remain poorly understood. The zebrafish pineal gland offers a simple system with which to address questions concerning the integration of signaling pathways during neural specification as it contains only two types of neurons – photoreceptors and projection neurons. We have previously shown that Notch signaling inhibits the projection neuron fate. Here, we show that BMP signaling is both necessary and sufficient to promote the photoreceptor fate. We also demonstrate that crosstalk between BMP and Notch signaling is required for the inhibition of a projection neuron fate in future photoreceptors. In this case, BMP signaling is required as a competence factor for the efficient activation of Notch targets. Our results indicate that both the induction of a photoreceptor fate and the interaction with Notch relies on a canonical BMP/ Smad5 pathway. However, the activation of Notch-dependent transcription does not require a canonical Smad5-DNA interaction. Our results provide new insights into how multiple signaling influences are integrated during cell fate specification in the vertebrate CNS.