Cytochrome P450s have generally been acknowledged as broadly tuned detoxifying enzymes. However, emerging evidence argues P450s have an integral role in cell signaling and developmental processes, via their metabolism of retinoic acid, arachidonic acid, steroids, and other cellular ligands. To study the morphogenesis of Drosophila sensory organs, we examined mutants with impaired mechanosensation and discovered one, nompH, encodes the cytochrome P450 CYP303a1. We now report the characterization of nompH, a mutant defective in the function of peripheral chemo- and mechanoreceptor cells, and demonstrate CYP303a1 is essential for the development and structure of external sensory organs which mediate the reception of vital mechanosensory and chemosensory stimuli. Notably this P450 is expressed only in sensory bristles, localizing in the apical region of the socket cell. The wide diversity of the P450 family and the growing number of P450s with developmental phenotypes suggests the exquisite tissue and subcellular specificity of CYP303a1 illustrates an important aspect of P450 function; namely, a strategy to process critical developmental signals in a tissue- and cell-specific manner.