Specification of cell fate in the compound eye of Drosophila appears to be controlled entirely by cell interactions. The sevenless gene is required for the correct determination of one of the eight photoreceptor cells (R7) in each ommatidium. It encodes a transmembrane protein with a tyrosine kinase domain and is expressed transiently on a subpopulation of ommatidial precursor cells including the R7 precursors. It is shown here that heat shock-induced indiscriminate expression of a sevenless complementary DNA throughout development can correctly specify R7 cell identity without affecting the development of other cells. Furthermore, discontinuous supply of sevenless protein during eye development leads to the formation of mosaic eyes containing stripes of sevenless+ and sevenless- ommatidia, suggesting that R7 cell fate can be specified only within a relatively short period during ommatidial assembly. These results support the hypothesis that the specification of cell fate by position depends on the interaction of a localized signal with a receptor present on many undifferentiated cells, and that the mere presence of the receptor alone is not sufficient to specify cell fate.