In the developing Drosophila eye, cell fate determination and pattern formation are directed by cell-cell interactions mediated by signal transduction cascades. Mutations at the rugose locus (rg) result in a rough eye phenotype due to a disorganized retina and aberrant cone cell differentiation, which leads to reduction or complete loss of cone cells. The cone cell phenotype is sensitive to the level of rugose gene function. Molecular analyses show that rugose encodes a Drosophila A kinase anchor protein (DAKAP 550). Genetic interaction studies show that rugose interacts with the components of the EGFR- and Notch-mediated signaling pathways. Our results suggest that rg is required for correct retinal pattern formation and may function in cell fate determination through its interactions with the EGFR and Notch signaling pathways.