Notch-dependent binary fate choice between sister neurons is one of the mechanisms to generate neural diversity. How these upstream neural fate specification programs regulate downstream effector genes to control axon targeting and neuropil assembly remains less well understood. Here, we report that Notch-dependent binary fate choice in Drosophila medulla neurons is required to regulate the Netrin axon guidance pathway, which controls targeting of transmedullary (Tm) neurons to lobula. In medulla neurons of Notch-on hemilineage composed of mostly lobula-targeting neurons, Notch signaling is required to activate theexpression of Netrin-B and repress the expression of its repulsive receptor Unc-5. Turning off Unc-5 is necessary for Tm neurons to target lobula. Furthermore, Netrin-B provided by Notch-on medulla neurons is required for correct targeting of Tm axons from later-generated medulla columns. Thus, the coordinate regulation of Netrin pathway components by Notch signaling ensures correct targeting of Tm axons and contributes to the neuropil assembly.