Irregular facets (If) is a dominant mutation of Drosophila that results in small eyes with fused ommatidia. Previous results showed that the gene Krüppel (Kr), which is best known for its early segmentation function, is expressed ectopically in If mutant eye discs. However, it was not known whether ectopic Kr activity is either the cause or the result of the If mutation. Here, we show that If is a gain-of-function allele of Kr. We then used the If mutation in a genetic screen to identify dominant enhancers and suppressors of Kr activity on the third chromosome. Of 30 identified Kr-interacting loci, two were cloned, and we examined whether they also represent components of a natural Kr-dependent developmental pathway of the embryo. We show that the two genes, eyelid (eld) and extramacrochaetae (emc), which encode a Bright family-type DNA binding protein and a helix-loop-helix factor, respectively, are necessary to achieve the singling-out of a unique Kr-expressing cell during the development of the Malpighian tubules, the excretory organs of the fly. The results indicate that the Kr gain-of-function mutation If provides a tool to identify genes that are active during eye development and that a number of them function also in the control of Kr-dependent developmental processes.