Asymmetric cell division is a general process used in many developmental contexts to create two differently fated cells from a single progenitor cell. Intrinsic mechanisms like the asymmetric transmission of tell-fate determinants during cell division, and extrinsic cell-interaction mechanisms, can mediate asymmetric divisions(1-3). During embryonic development of the Drosophila central nervous system, neural stem cells called neuroblasts divide asymmetrically to produce another multipotent neuroblast and a ganglion mother cell (GMC) of more restricted developmental potential. Intrinsic mechanisms promote asymmetric division of neuroblasts : for example, the transcription factor Prospero localizes to the basal cell cortex of mitotic neuroblasts and then segregates exclusively into the GMC, which buds off from the basal side of the neuroblast(4-6). In the GMC, Prospero translocates to the nucleus, where it establishes differential gene expression between sibling cells. Here we report the identification of a gene, miranda, which encodes a new protein that co-localizes with Prospero in mitotic neuroblasts, tethers Prospero to the basal cortex of mitotic neuroblasts, directing Prospero into the GMC, and releases Prospero from the cell cortex within GMCs. miranda thus creates intrinsic differences between sibling cells by mediating the asymmetric segregation of a transcription factor into only one daughter cell during neural stem-cell division.