The development of the Drosophila R7 photoreceptor cell is determined by a specific inductive interaction between the R8 photoreceptor cell and a single neighboring precursor cell. This process is mediated by bride of sevenless (boss), a cell-surface bound ligand, and the sevenless (sev) tyrosine kinase receptor. The boss ligand is expressed specifically on the surface of the R8 cell, whereas the sev receptor is expressed on 5 cells contacting the developing R8 cell and other cells not in contact with R8. By altering the spatial and temporal expression of boss, we demonstrate that sev-expressing cells that do not contact R8 can assume an R7 cell fate. By contrast, the sev-expressing precursor cells to the R1-R6 photoreceptor cells that do contact R8 are nonresponsive to the inductive cue. Using the rough and Nspl mutations, we demonstrate that an early commitment to an R1-R6 cell fate blocks the pathway of sev activation in these cells.