Nonsense-mediated RNA decay (NMD) is a surveillance mechanism that degrades transcripts containing nonsense mutations, preventing the translation of truncated proteins. NMD also regulates the levels of many endogenous mRNAs. While the mechanism of NMD is gradually understood, its physiological role remains largely unknown. The core NMD genes upf1 and upf2 are essential in several organisms, which may reflect an important developmental role for NMD. Alternatively, the lethality of these mutants might arise from their function in NMD-independent processes. To analyze the developmental importance of NMD, we studied Drosophila mutants of the other core NMD gene, upf3. We compare the resulting upf3 phenotype with those defects observed in upf1 and upf2 loss-of-function mutants, as well as with flies expressing a mutant Upf2 protein unable to bind Upf3. Our results show that Upf3 is an NMD effector in the fly but, unlike Upf1 and Upf2, plays a peripheral role in the degradation of most NMD targets and is not required for development or viability. Furthermore, Upf1 and Upf2 loss-of-function inhibits cell growth and induces apoptosis through a Upf3-independent pathway. Accordingly, disruption of Upf2-Upf1 interaction causes death, while the Upf2-Upf3 complex is dispensable for viability. Our findings suggest that NMD is essential for cell growth and animal development, and that the lethality of upf1 and upf2 mutants is not due to disrupting their roles during NMD-independent processes, but to their function in the degradation of specific mRNAs by the NMD pathway. Furthermore, our results show that Upf3 is not always essential in NMD.