Photoreceptor and cone cells in the Drosophila eye are recruited following activation of the epidermal growth factor receptor (EGFR) pathway. We have identified echinoid (ed) as a novel putative cell adhesion molecule that negatively regulates EGFR signaling. The ed mutant phenotype is associated with extra photoreceptor and cone cells. Conversely, ectopic expression of ed in the eye leads to a reduction in the number of photoreceptor cells. ed expression is independent of EGFR signaling and ED is localized to the plasma membrane of every cells throughout the eye disc. We present evidence that ed acts nonautonomously to generate extra R7 cells by a mechanism that is sina-independent but upstream of Tramtrack (TTK88). Together, our results support a model whereby ED defines an independent pathway that antagonizes EGFR signaling by regulating the activity, but not the level, of the TTK88 transcriptional repressor.