The transcription repressor Tramtrack (TTK) is found in cone cells but not photoreceptor cells of the Drosophila eye. We show that down-regulation of TTK expression occurs in photoreceptor cells and is required for their fate determination. Down-regulation requires the presence of Phyllopod (PHYL), which is induced by the RAS pathway, and Seven In Absentia (SINA). Loss of either gene causes accumulation of TTK in photoreceptor cells, and TTK does not accumulate in cone cells if both PHYL and SINA are present. We report that SINA and PHYL promote ubiquitination and rapid degradation of TTK by the proteasome pathway in cell culture, and both SINA and PHYL bind to the N-terminal domain of TTK. These results argue that photoreceptor differentiation is regulated by the RAS pathway through targeted proteolysis of the TTK repressor.