In Drosophila, the sine oculis (so) gene is important for the development of the entire visual system, including Bolwig's organ, compound eyes and ocelli. Together with twin of eyeless, eyeless, eyes absent and dachshund, so belongs to a network of genes that by complex interactions initiate eye development. Although much is known about the genetic interactions of the genes belonging to this retinal determination network, only a few such regulatory interactions have been analysed down to the level of DNA-protein interactions. Previous work in our laboratory identified an eye/ocellus specific enhancer of the sine oculis gene that is directly regulated by eyeless and twin of eyeless. We further characterized this regulatory element and identified a minimal enhancer fragment of so that sets up an autoregulatory feedback loop crucial for proper ocelli development. By systematic analysis of the DNA-binding specificity of so we identified the most important nucleotides for this interaction. Using the emerging consensus sequence for SO-DNA binding we performed a genome-wide search and have thereby been able to identify eyeless as well as the signalling gene hedgehog as putative targets of so. Our results strengthen the general assumption that feedback loops among the genes of the retinal determination network are crucial for proper development of eyes and ocelli.