MicroRNAs (miRNAs) have been implicated as regulators of central nervous system (CNS) development and function. miR-124 is an evolutionarily ancient, CNS-specific miRNA. On the basis of the evolutionary conservation of its expression in the CNS, miR-124 is expected to have an ancient conserved function. Intriguingly, investigation of miR-124 function using antisense-mediated miRNA depletion has produced divergent and in some cases contradictory findings in a variety of model systems. Here we investigated miR-124 function using a targeted knockout mutant and present evidence for a role during central brain neurogenesis in Drosophila melanogaster. miR-124 activity in the larval neuroblast lineage is required to support normal levels of neuronal progenitor proliferation. We identify anachronism (ana), which encodes a secreted inhibitor of neuroblast proliferation, as a functionally important target of miR-124 acting in the neuroblast lineage. ana has previously been thought to be glial specific in its expression and to act from the cortex glia to control the exit of neuroblasts from quiescence into the proliferative phase that generates the neurons of the adult CNS during larval development. We provide evidence that ana is expressed in miR-124-expressing neuroblast lineages and that ana activity must be limited by the action of miR-124 during neuronal progenitor proliferation. We discuss the possibility that the apparent divergence of function of miR-124 in different model systems might reflect functional divergence through target site evolution.