Sensory neuron diversity is required for organisms to decipher complex environmental cues. In Drosophila, the olfactory environment is detected by 50 different olfactory receptor neuron (ORN) classes that are clustered in combinations within distinct sensilla subtypes. Each sensilla subtype houses stereotypically clustered 1–4 ORN identities that arise through asymmetric divisions from a single multipotent sensory organ precursor (SOP). How each class of SOPs acquires a unique differentiation potential that accounts for ORN diversity is unknown. Previously, we reported a critical component of SOP diversification program, Rotund (Rn), increases ORN diversity by generating novel developmental trajectories from existing precursors within each independent sensilla type lineages. Here, we show that Rn, along with BarH1/H2 (Bar), Bric-à-brac (Bab), Apterous (Ap) and Dachshund (Dac), constitutes a transcription factor (TF) network that patterns the developing olfactory tissue. This network was previously shown to pattern the segmentation of the leg, which suggests that this network is functionally conserved. In antennal imaginal discs, precursors with diverse ORN differentiation potentials are selected from concentric rings defined by unique combinations of these TFs along the proximodistal axis of the developing antennal disc. The combinatorial code that demarcates each precursor field is set up by cross-regulatory interactions among different factors within the network. Modifications of this network lead to predictable changes in the diversity of sensilla subtypes and ORN pools. In light of our data, we propose a molecular map that defines each unique SOP fate. Our results highlight the importance of the early prepatterning gene regulatory network as a modulator of SOP and terminally differentiated ORN diversity. Finally, our model illustrates how conserved developmental strategies are used to generate neuronal diversity.