The specification of the R7 photoreceptor in the Drosophila eye has become a classic model for understanding how cell fates are assigned in developing systems. R7 is derived from a group of cells that also gives rise to the R1/6 photoreceptor class and the non-photoreceptor cone cells. Our studies examine the signals and cellular information that direct each of these cell types. The cell fates are directed by the combined actions of the Receptor Tyrosine Kinase (RTK) and Notch (N) signaling pathways. The RTK pathway acts to remove the transcription factor Tramtrack (Ttk) which represses the photoreceptor fate. If a cell receives an RTK signal sufficient to remove Ttk then the photoreceptor fate is specified; if not, the cone cell fate results. If Ttk is removed from a cell and its N activity is high then it is specified as an R7, but if its N activity is low then it becomes an R1/6 class photoreceptor. Thus, a remarkably simple molecular code underlies the specification of the fates: 1. Ttk degraded or not: 2. N activity high or low. In the R1/6 and cone cell precursors the molecular codes are achieved with relative simplicity but in the R7 precursor, manifold interactions occur between the RTK and N pathways, and to-date we have identified 4 distinct roles played by N in R7 fate specification. In this review we detail this molecular complexity, and describe how the RTK/N pathway crosstalk eventually leads to the simple molecular code of Tramtrack removed and N activity high. Furthermore, we describe the role played by the transcription factor Lozenge (Lz) in directing retinal precursor fates, and how the RTK/N signals specify different retinal cell types depending on the presence or absence of Lz.