Holometabolous insects like Drosophila proceed through two phases of visual system development. The embryonic phase generates simple eyes of the larva. The postembryonic phase produces the adult specific compound eyes during late larval development and pupation. In primitive insects, by contrast, eye development persists seemingly continuously from embryogenesis through the end of postembryogenesis. Comparative literature suggests that the evolutionary transition from continuous to biphasic eye development occurred via transient developmental arrest. This review investigates how the developmental arrest model relates to the gene networks regulating larval and adult eye development in Drosophila, and embryonic compound eye development in primitive insects. Consistent with the developmental arrest model, the available data suggest that the determination of the anlage of the rudimentary Drosophila larval eye is homologous to the embryonic specification of the juvenile compound eye in directly developing insects while the Drosophila compound eye primordium is evolutionarily related to the yet little studied stem cell based postembryonic eye primordium of primitive insects.