Receptor tyrosine kinases (RTKs) and Notch (N) proteins are different types of transmembrane receptors that transduce extracellular signals and control cell fate. Here we examine cell fate specification in the Drosophila retina and ask how N acts together with the RTKs Sevenless (Sev) and the EGF receptor (DER) to specify the R7 photoreceptor. The retina is composed of many hundred ommatidia, each of which grows by recruiting surrounding, undifferentiated cells and directing them to particular fates. The R7 photoreceptor derives from a cohort of three cells that are incorporated together following specification of the R2-R5 and R8 photoreceptors. Two cells of the cohort are specified as the R1/6 photoreceptor type by DER activation. These cells then activate N in the third cell (the R7 precursor). By manipulation of N and RTK signaling in diverse combinations we establish three roles for N in specifying the R7 fate. The first role is to impose a block to photoreceptor differentiation; a block that DER activation cannot overcome. The second role, paradoxically, is to negate the first; Notch activation up-regulates Sev expression, enabling the presumptive R7 cell to receive an RTK signal from R8 that can override the block. The third role is to specify the cell as an R7 rather than an R1/6 once RTK signaling has specified the cells as a photoreceptor. We speculate why N acts both to block and to facilitate photoreceptor differentiation, and provide a model for how N and RTK signaling act combinatorially to specify the R1/6 and R7 photoreceptors as well as the surrounding non-neuronal cone cells.