Development of Drosophila sensory bristles provides a simple model for studying pattern forming mechanisms. In the Drosophila notum, large and small mechanosensory bristles are organized in a pattern that depends on the expression of proneural genes of ACS complex and prepattern genes such as pnr , ush, Iro-C complex, emc and sr. Hairy, which is known to have a prepattern function in the Drosophila leg, is also expressed in the notum. In order to gain an insight into the pattern forming mechanisms in the notum and to understand the function of hairy in this process, the analysis of hairy function and regulation was undertaken. Here, we show that hairy has a complex expression pattern during the third larval instar. We also show that hairy functions as a prepattern gene during development of both early and late specified bristles, the mechanosensory macrochaetae and microchateae. Our studies uncover, for the first time, a function for Hairy in regulating proneural gene expression within the notal macrochaete primordia. Furthermore, we show that Hairy acts through a microchaete-specific cis-regulatory element of the proneural achaete gene to restrict development of microchaete bristles to the anterior notum or scutum. Our findings also show that Hh, Dpp, Wg and, potentially, EGFR and Hth are involved in regulation of hairy expression in the notum and hinge regions. Together these studies demonstrate that the hairy gene functions to link the activity of global regulators of notal development, such as the Hh and Dpp signals, to local regulators, such as the proneural regulator, Achaete, which specifies a neural fate.