The intermingling of larval functional neurons with adult-specific neurons during metamorphosis contributes to the development of the adult Drosophila brain. To better understand this process, we characterized the development of a dorsal cluster (DC) of Atonal-positive neurons that are born at early larval stages but do not undergo extensive morphogenesis until pupal formation. We found that Baboon(Babo)/dSmad2-mediated TGF-beta signaling, known to be essential for remodeling of larval functional neurons, is also indispensable for proper morphogenesis of these adult-specific neurons. Mosaic analysis reveals slowed development of mutant DC neurons, as evidenced by delays in both neuronal morphogenesis and atonal expression. We observe similar phenomena in other adult-specific neurons. We further demonstrate that Babo/dSmad2 operates autonomously in individual neurons and specifically during the late larval stage. Our results suggest that Babo/dSmad2 signaling prior to metamorphosis may be widely required to prepare neurons for the dynamic environment present during metamorphosis.