Drosophila imaginal discs are an excellent model system for studies of developmental plasticity. In imaginal discs, most cells adhere strictly to their specific identity, but some cells undergo transdetermination, a process wherein the determined identity switches to another disc-specific identity. In this study, we performed gain-of-function screening and identified a gene, CG17836/Xrp1, that induces ectopic antennae in the eye field upon overexpression at the early eye disc stage. An essential factor in the distalization process, Distalles, and its upstream regulators Wingless, Hedgehog, and Decapentaplegic, are ectopically induced by CG17836/Xrp1 overexpression in eye discs, and this provides molecular evidence of the formation of ectopic antennae. Further, forced expression of CG17836/Xrp1 induced severe cell-proliferation defects. These findings suggest that CG17836/Xrp1 is involved in the regulation of cell proliferation in eye discs and affects disc identity specification.