Overexpression of the Notch antagonist Hairless (H) during imaginal development in Drosophila is correlated with tissue loss and cell death. Together with the co-repressors Groucho (Gro) and C-terminal binding protein (CtBP), H assembles a repression complex on Notch target genes, thereby downregulating Notch signalling activity. Here we investigated the mechanisms underlying H-mediated cell death in S2 cell culture and in vivo during imaginal development in Drosophila. First, we mapped the domains within the H protein that are required for apoptosis induction in cell culture. These include the binding sites for the co-repressors, both of which are essential for H-mediated cell death during fly development. Hence, the underlying cause of H-mediated apoptosis seems to be a transcriptional downregulation of Notch target genes involved in cell survival. In a search for potential targets, we observed transcriptional downregulation of rho-lacZ and EGFR signalling output. Moreover, the EGFR antagonists lozenge, klumpfuss and argos were all activated upon H overexpression. This result conforms to the proapoptotic activity of H, as these factors are known to be involved in apoptosis induction. Together, the results indicate that H induces apoptosis by downregulation of EGFR signalling activity. This highlights the importance of a coordinated interplay of Notch and EGFR signalling pathways for cell survival during Drosophila development.