The choice of self-renewal versus differentiation is a fundamental issue in stem cell and cancer biology. Neural progenitors of the Drosophila post-embryonic brain, larval neuroblasts (NBs), divide asymmetrically in a stem cell-like fashion to generate a self-renewing NB and a Ganglion Mother Cell (GMC), which divides terminally to produce two differentiating neuronal/glial daughters. Here we show that Aurora-A (AurA) acts as a tumor suppressor by suppressing NB self-renewal and promoting neuronal differentiation. In aurA loss-of-function mutants, supernumerary NBs are produced at the expense of neurons. AurA suppresses tumor formation by asymmetrically localizing atypical protein kinase C (aPKC), an NB proliferation factor. Numb, which also acts as a tumor suppressor in larval brains, is a major downstream target of AurA and aPKC. Notch activity is up-regulated in aurA and numb larval brains, and Notch signaling is necessary and sufficient to promote NB self-renewal and suppress differentiation in larval brains. Our data suggest that AurA, aPKC, Numb, and Notch function in a pathway that involved a series of negative genetic interactions. We have identified a novel mechanism for controlling the balance between self-renewal and neuronal differentiation during the asymmetric division of Drosophila larval NBs.