The onset of pattern formation in the developing Drosophila eye is marked by the simultaneous synchronization of all cells in the G1 phase of the cell cycle. These cells will then either commit to another round of cell division or differentiate into neurons. Although cell cycle synchronization occurs in roughex (rux) mutants, cells circumvent G1 and all cells enter S phase, including cells that would normally differentiate. This leads to defects in early steps of pattern formation and cell fate determination. rux is suppressed by mutations in genes that promote cell cycle progression (i.e., cyclin A and string) and enhanced by mutations in genes that promote differentiation (i.e., Ras1 and Star). rux encodes a novel protein of 335 amino acids. We propose that rux functions as a negative regulator of G1 progression in the developing eye.