A new conditional Egfr allele was used to dissect the roles of the receptor in eye development and to test two published models. EGFR function is necessary for morphogenetic furrow initiation, is not required for establishment of the founder R8 cell in each ommatidium, but is necessary to maintain its differentiated state. EGFR is required subsequently for recruitment of all other neuronal cells. The initial EGFR-dependent MAP kinase activation occurs in the furrow, but the active kinase (dp-ERK) is observed only in the cytoplasm for over 2 hours. Similarly, SEVENLESS-dependent activation results in cytoplasmic appearance of dp-ERK for 6 hours. These results suggest an additional regulated step in this pathway and we discuss models for this.