During Drosophila eye development, the proneural gene atonal specifies founding R8 photoreceptors of individual ommatidia, evenly spaced relative to one another in a pattern that prefigures ommatidial organisation in the mature compound eye. Beyond providing neural competence, however, it has remained unclear to what extent atonal controls specific R8 properties. We show here that reduced Atonal function gives rise to R8 photoreceptors that are functionally compromised: both recruitment and axon pathfinding defects are evident. Conversely, prolonged Atonal expression in R8 photoreceptors induces defects in inductive recruitment as a consequence of hyperactive EGFR signalling. Surprisingly, such prolonged expression also results in R8 pattern formation defects in a process associated with both Hedgehog and Receptor Tyrosine Kinase signalling. Our results strongly suggest that Atonal regulates signalling and other properties of R8 precursors.