The differentiation of serotonin-immunoreactive (5-HTi) neurons in the optic lobes of fleshflies was studied during in situ development and in in vivo cultures. All 5-HTi neurons with cell bodies in the imaginal optic lobes differentiate during postembryonic (pupal) development. These are local anaxonal neurons. In addition there are two large 5-HTi bilateral neurons that connect all optic lobe neuropil regions on both sides of the brain and have their cell bodies in the midbrain proper. Deafferentation of optic lobes cultured in vivo leads to drastic reduction in optic lobe volume and increased cell death. All the 5-HTi neurons differentiate after deafferentation but their morphology changes. The neuropil receiving the photoreceptor inputs, the lamina, degenerates but a disorganized "pseudolamina" is formed by the processes of the two large 5-HTi neurons. The layering of the optic lobe neuropils cannot be distinguished and 5-HTi processes form novel projectional patterns. Hence, the 5-HTi neurons do not require afferent inputs from the retina for their differentiation and survival, but the effect on other optic lobe interneurons is reflected in the morphological plasticity of the 5-HTi neurons.