Response to the insect hormone ecdysone is mediated by a nuclear receptor complex containing Ultraspiracle (USP) and the Ecdysone Receptor (EcR). Among other phenotypes, loss of functional USP in Drosophila eye development results in an accelerated morphogenetic furrow, although loss of ecdysone arrests the furrow. We have shown that USP both represses and activates a gene affecting furrow movement, the ecdysone-responsive Z1 isoform of Broad-Complex, and we report additional usp mutant phenotypes. Using targeted replacement of USP to rescue usp mutant clones in the eye, we have mapped various USP functions and tested whether the USP nuclear receptor has an activating as well as a repressive effect on furrow movement. Furrow movement and related phenotypes are rescued by the presence of USP in a limited domain near the furrow while other phenotypes are rescued by USP expression posterior to the furrow. Our data indicate roles for USP activity at multiple developmental stages and help explain why loss of functional USP leads to furrow advancement while loss of ecdysone stops furrow movement.