The proneural genes achaete (ac) and scute (sc) confer to Drosophila epidermal cells the ability to become sensory mother cells (SMCs). In imaginal discs, ac-sc are expressed in groups of cells, the proneural clusters, which are thought to delimit the areas where SMCs arise. We have visualized with the resolution of single cells the initial stages of sensory organ development by following the evolving pattern of proneural clusters and the emergence of SMCs. At reproducible positions within clusters, a small number of cells accumulate increased amounts of ac-sc protein. Subsequently, one of these cells, the SMC, accumulates the highest amount. Later, at least some SMCs become surrounded by cells with reduced ac-sc expression, a phenomenon probably related to lateral inhibition. Genetic mosaic analyses of cells with different doses of ac-sc genes, the sc expression in sc mutants, and the above findings show that the levels of ac-sc products are most important for SMC singling-out and SMC state maintenance. These products do not intervene in the differentiation of SMC descendants. The extramacrochaetae gene, an antagonist of proneural genes, negatively regulates sc expression, probably by interfering with activators of this gene.