The mechanisms that generate neural diversity during development remains largely unknown. Here, we use scRNA-seq methodology to discover new features of the Drosophila larval CNS across several key developmental timepoints. We identify multiple progenitor subtypes - both stem cell-like neuroblasts and intermediate progenitors - that change gene expression across larval development, and report on new candidate markers for each class of progenitors. We identify a pool of quiescent neuroblasts in newly hatched larvae and show that they are transcriptionally primed to respond to the insulin signaling pathway to exit from quiescence, including relevant pathway components in the adjacent glial signaling cell type. We identify candidate "temporal transcription factors" (TTFs) that are expressed at different times in progenitor lineages. Our work identifies many cell type specific genes that are candidates for functional roles, and generates new insight into the differentiation trajectory of larval neurons.