In the Drosophila larval brain, type I and type II neuroblasts (NBs) undergo a series of asymmetric divisions which give rise to distinct progeny lineages. The intermediate neural progenitors (INPs) exist only in type II NB lineages. In this study, we reveal a novel function of Inscuteable (Insc) that acts to maintain type I NB lineage identity. In insc type I NB clones of mosaic analyses with a repressible cell marker (MARCM), the formation of extra Deadpan (Dpn)(+) NB-like and GMC-like cells is observed. The lack of Insc leads to the defective localization and segregation of Numb during asymmetric cell division. By the end of cytokinesis, this results in insufficient Numb in ganglion mother cells (GMCs). The formation of extra Deadpan (Dpn)(+) cells in insc clones is prevented by the attenuation of Notch activity. This suggests that Insc functions through the Numb/Notch signaling pathway. We also show that in the absence of Insc in type I NB lineages, the cellular identity of GMCs is altered where they adopt an INP-like cell fate as indicated by the initiation of Dpn expression accompanied by a transient presence of Earmuff (Erm). These INP-like cells have the capacity to divide multiple times. We conclude that Insc is necessary for the maintenance of type I NB lineage identity. Genetic manipulations to eliminate most type I NBs with overproliferating type II NBs in the larval brain lead to altered circadian rhythms and defective phototaxis in adult flies. This indicates that the homeogenesis of NB lineages is important for the adult's brain function. Copyright (C) 2017, Institute of Genetics and Developmental Biology, Chinese Academy of Sciences, and Genetics Society of China. Published by Elsevier Limited and Science Press. All rights reserved.