Asymmetric cell division (ACD) is a fundamental mechanism to generate cell diversity, giving rise to daughter cells with different developmental potentials. ACD is manifested in the asymmetric segregation of proteins or mRNAs, when the two daughter cells differ in size or are endowed with different potentials to differentiate into a particular cell type (Horvitz and Herskowitz, Cell 68:237-255, 1992). Drosophila neuroblasts, the neural stem cells of the developing fly brain, are an ideal system to study ACD since this system encompasses all of these characteristics. Neuroblasts are intrinsically polarized cells, utilizing polarity cues to orient the mitotic spindle, segregate cell fate determinants asymmetrically, and regulate spindle geometry and physical asymmetry. The neuroblast system has contributed significantly to the elucidation of the basic molecular mechanisms underlying ACD. Recent findings also highlight its usefulness to study basic aspects of stem cell biology and tumor formation. In this review, we will focus on what has been learned about the basic mechanisms underlying ACD in fly neuroblasts.