During metamorphosis, the central nervous system (CNS) is reconstructed through the concerted action of cell birth, death, and remodeling, so that it can serve the novel and complex behavioral needs of the adult insect. In Drosophila, Broad Complex (BRC) zinc-finger transcription factors are essential for many aspects of metamorphosis, including reorganization of the CNS. In particular, we showed previously that some mutant alleles disrupt the assembly of visual system synaptic neuropils. Using an enhancer-detector screen, we have now identified a candidate BRC target gene, H217, that is normally expressed in visual system neural precursor cells of the inner proliferative center. Moreover, the P-element insertion in the H217 line has caused a hypomorphic mutation in an essential gene, with an optic lobe disorganization phenotype very similar to that seen in BRC mutants. In BRC mutants of the br complementation group (but not in rbp or 2Bc mutants), the H217 enhancer is ectopically expressed in lamina precursor cells (LPCs) whose proliferation is regulated by signals from photoreceptor axons. As predicted by the current model of BRC structure-function relationships, we demonstrated that BRC-Z2 isoforms, when induced during the third larval instar, can repress H217 enhancer activity in the LPCs, whereas BRC-Z3 cannot. Taken together, the data suggest that the H217 P element has tagged an essential gene repressed by BRC-Z2 in LPCs and required for the normal architecture of the retinotopically connected visual system neuropils.