Photoreceptor development begins in the larval eye imaginal disc, where eight distinct photoreceptor cells (R1-R8) are sequentially recruited into each of the developing ommatidial clusters. Final photoreceptor differentiation, including rhabdomere formation and rhodopsin expression, is completed during pupal life. During pupation, spalt was previously proposed to promote R7 and R8 terminal differentiation. Here we show that spalt is required for proper R7 differentiation during the third instar larval stage since the expression of several R7 larval markers (prospero, enhancer of split mdelta0.5, and runt) is lost in spalt mutant clones. In R8, spalt is not required for cell specification or differentiation in the larval disc but promotes terminal differentiation during pupation. We show that spalt is necessary for senseless expression in R8 and sufficient to induce ectopic senseless in R1-R6 during pupation. Moreover, misexpression of spalt or senseless is sufficient to induce ectopic rhodopsin 6 expression and partial suppression of rhodopsin 1. We demonstrate that spalt and senseless are part of a genetic network, which regulates rhodopsin 6 and rhodopsin 1. Taken together, our results suggest that while spalt is required for R7 differentiation during larval stages, spalt and senseless promote terminal R8 differentiation during pupal stages, including the regulation of rhodopsin expression.