The role of scabrous (sca) in the evenly spaced bristle pattern of Drosophila is explored. Loss-of-function of sca results in development of an excess of bristles. Segregation of alternately spaced bristle precursors and epidermal cells from a group of equipotential cells relies on lateral inhibition mediated by Notch and Delta (Dl). In this process, presumptive bristle precursors inhibit the neural fate of neighbouring cells, causing them to adopt the epidermal fate. We show that Dl, a membrane-bound ligand for Notch, can inhibit adjacent cells, in direct contact with the precursor, in the absence of Sca. In contrast, inhibition of cells not adjacent to the precursor requires, in addition, Sca, a secreted molecule with a fibrinogen-related domain. Over-expression of Sca in a wild-type background, leads to increased spacing between bristles, suggesting that the range of signalling has been increased. scabrous acts nonautonomously, and we present evidence that, during bristle precursor segregation, Sca is required to maintain the normal adhesive properties of epithelial cells. The possible effects of such changes on the range of signalling are discussed. We also show that the sensory organ precursors extend numerous fine cytoplasmic extensions bearing Dl molecules, and speculate on a possible role for these structures during signalling.