Drosophila uses 50 different olfactory receptor neuron (ORN) classes that are clustered in combinations within distinct sensilla subtypes to decipher a complex chemical environment. Each sensilla subtype houses 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. Here, we show that Rn, along with BarH1/H2 (Bar), Bric-à-brac (Bab), Apterous (Ap) and Dachshund (Dac), is part of a conserved proximodistal (PD) gene regulatory network module that patterns the antennal disc into seven concentric rings and diversifies SOP identities. Each ring expresses a unique combination of the aforementioned transcription factors, and encodes the differentiation potentials for a limited number of sensilla subtypes. Genetic perturbations of the network lead to predictable changes in ORN diversity. These data suggest that the diversification of precursor fields by the prepatterning network is the first step to neuronal diversification, followed by SOP selection by proneural genes, and Notch-mediated neurogenesis. As each step operates in a context-dependent manner, deployment of the same transcription factor network module may regulate neuronal diversity in parallel systems with completely different fate outputs.