Programmed cell death (PCD) plays a central role in the sculpting and maturation of developing epithelia. In adult tissue, PCD plays a further role in the prevention of malignancy though removal of damaged cells. Here, we report that mutations in klumpfuss result in an excess of support cells during maturation of the developing Drosophila pupal retina. These ectopic cells are the result of a partial and specific failure of apoptotic death during normal cell fate selection. klumpfuss is required and differentially expressed in the cells that choose the life or death cell fate. We also provide genetic and biochemical evidence that klumpfuss regulates this process through down-regulation of the Epidermal Growth Factor Receptor/dRas1 signaling pathway. Based on its sequence Klumpfuss is an EGR-class nuclear factor, and our results suggest a mechanism by which mutations in EGR-class factors such as Wilms' Tumor Suppressor-1 may result in oncogenic events such as pediatric kidney tumors.