The fly eyes absent (eya) gene which is essential for compound eye development in Drosophila, was shown to be functionally replaceable in eye development by a vertebrate Eya homolog. The relationship between eya and that of the eyeless gene, a Pax-6 homolog, critical for eye formation in both flies and man, was defined: eya was found to be essential for eye formation by eyeless. Moreover, eya could itself direct ectopic eye formation, indicating that eya has the capacity to function as a master control gene for eye formation. Finally, we show that eya and eyeless together were more effective in eye formation than either gene alone. These data indicate conservation of the pathway of eya function between flies and vertebrates; they suggest a model whereby eya/Eya gene function is essential for eye formation by eyeless/Pax-6, and that eya/Eya can in turn mediate, via a regulatory loop, the activity of eyeless/Pax-6 in eye formation.