Precise neuronal numbers are required for circuit formation and function. Known strategies to control neuronal numbers involve regulating either cell proliferation or survival. In the developing Drosophila visual system photoreceptors from the eye-disc induce their target field, the lamina, one column at a time. Although each column initially contains ~6 precursors, only 5 differentiate into neurons of unique identities (L1-L5); the extra precursor undergoes apoptosis. We uncovered that Hedgehog signalling patterns columns, such that the 2 precursors experiencing the lowest signalling activity are specified as L5s; only one differentiates while the other extra precursor dies. We showed that a glial population called the outer chiasm giant glia (xgO), which reside below the lamina, relays differentiation signals from photoreceptors to induce L5 differentiation. The precursors nearest to xgO differentiate into L5s and antagonise inductive signalling to prevent the extra precursors from differentiating, resulting in their death. Thus, tissue architecture and feedback from young neurons fine-tune differentiation signals from glia to limit the number of neurons induced.