In homozygous mutants of Drosophila lethal-2-giant larvae (lgl), tissues lose apico-basal cell polarity and exhibit ectopic proliferation. Here, we use clonal analysis in the developing eye to investigate the effect of lgl null mutations in the context of surrounding wild-type tissue. lgl- clones in the larval eye disc exhibit ectopic expression of the G1-S regulator, Cyclin E, and ectopic proliferation, but do not lose apico-basal cell polarity. Decreasing the perdurance of Lgl protein in larval eye disc clones, by forcing extra proliferation of lgl- tissue (using a Minute background), leads to a loss in cell polarity and to more extreme ectopic cell proliferation. Later in development at the pupal stage, lgl mutant photoreceptor cells show aberrant apico-basal cell polarity, but this is not associated with ectopic proliferation, presumably because cells are differentiated. Thus in a clonal context, the ectopic proliferation and cell polarity defects of lgl- mutants are separable. Furthermore, lgl- mosaic eye discs have alterations in the normal patterns of apoptosis: in larval discs some lgl- and wild-type cells at the clonal boundary undergo apoptosis and are excluded from the epithelia, but apoptosis is decreased elsewhere in the disc, and in pupal retinas lgl- tissue shows less apoptosis.