<p>Under homeostatic conditions, haematopoiesis in <i>Drosophila</i> larvae occurs in the lymph gland and sessile haemocyte clusters to produce two functionally and morphologically different cells: plasmatocytes and crystal cells. It is well-established that in the lymph gland both cell types stem from a binary decision of the medullary prohaemocyte precursors. However, in sessile clusters and dorsal vessel, crystal cells have been shown to originate from the transdifferentiation of plasmatocytes in a Notch/Serrate-dependent manner. We show that transdifferentiation occurs also in the lymph gland. In vivo phagocytosis assays confirm that cortical plasmatocytes are functionally differentiated phagocytic cells. We uncover a double-positive population in the cortical zone that lineage-tracing and long-term live imaging experiments show will differentiate into crystal cells. The reduction of Notch levels within the lymph gland plasmatocyte population reduces crystal cell number. This extension of a transdifferentiation mechanism reinforces the growing role of haematopoietic plasticity in maintaining homeostasis in <i>Drosophila</i> and vertebrate systems. Future work should test the regulation and relative contribution of these two processes under different immunological and/or metabolic conditions.</p>