The formation and maintenance of cell polarity is essential for epithelial morphogenesis. Dpatj (Drosophila homolog of mammalian Patj) is a multi-PDZ domain protein that localizes to the apical cell membrane and forms a protein complex with cell polarity proteins, Crumbs (Crb) and Stardust (Sdt). Whereas Crb and Sdt are known to be required for the organization of adherens junctions (AJs) and rhabdomeres in differentiating photoreceptors, the in vivo function of Dpatj as a member of the Crb complex in developing eye has been unclear due to the lack of loss-of-function mutations specifically affecting the dpatj gene. Our genetic analysis of hypomorph, null, and RNA interference reveals distinct dual functions of Dpatj in developing and mature photoreceptors. The C-terminal region (PDZ domains 2-4) of Dpatj is not essential for development of the animal but is required to prevent late-onset photoreceptor degeneration. In contrast, the N-terminal region of Dpatj is essential for animal viability and photoreceptor morphogenesis during development. The localization and maintenance of Crb and Sdt in the apical photoreceptor membrane are strongly affected by reduced levels of Dpatj. Dpatj is necessary for proper positioning of AJs and the integrity of photoreceptors in the developing retina as well as for the maintenance of adult photoreceptors. Our study provides evidence that Dpatj has domain-specific early and late functions in regulating the localization and stability of the Crb-Sdt complex in photoreceptor cells.