The posteriorly expressed signaling molecules Hedgehog and Decapentaplegic drive photoreceptor differentiation in the Drosophila eye disc, while at the anterior lateral margins Wingless expression blocks ectopic differentiation. We show here that mutations in axin prevent photoreceptor differentiation and lead to tissue overgrowth and that both these effects are due to ectopic activation of the Wingless pathway. In addition, ectopic Wingless signaling causes posterior cells to take on an anterior identity, reorienting the direction of morphogenetic furrow progression in neighboring wild-type cells. We also show that signaling by Decapentaplegic and Hedgehog normally blocks the posterior expression of anterior markers such as Eyeless. Wingless signaling is not required to maintain anterior Eyeless expression and in combination with Decapentaplegic signaling can promote its downregulation, suggesting that additional molecules contribute to anterior identity. Along the dorsoventral axis of the eye disc, Wingless signaling is sufficient to promote dorsal expression of the Iroquois gene mirror, even in the absence of the upstream factor pannier. However, Wingless signaling does not lead to ventral mirror expression, implying the existence of ventral repressors.