The choice and timing of specific developmental pathways in organogenesis are determined by tissue-specific temporal and spatial cues that are acted upon to impart unique cellular and compartmental identities. A consequence of cellular signaling is the rapid transcriptional reprogramming of a wide variety of target genes. To overcome intrinsic epigenetic chromatin barriers to transcription modulation, histone modifying and remodeling complexes are employed. The deposition or erasure of specific covalent histone modifications, including acetylation, methylation, and ubiquitination are essential features of gene activation and repression. We have found that the activity of a specific class of histone demethylation enzymes is required for the specification of vein cell fates during Drosophila wing development. Genetic tests revealed that the Drosophila LSD1-CoREST complex is required for proper cell specification through regulation of the DPP/TGFβ pathway. An important finding from this analysis is that LSD1-CoREST functions through control of rhomboid expression in an EGFR-independent pathway.