Abstract The sequential specification of cell fates in the Drosophila eye requires repeated activation of the epidermal growth factor receptor (EGFR)/Ras/MAP kinase (MAPK) pathway. Equally important are the multiple layers of inhibitory regulation that prevent excessive or inappropriate signaling. Here we describe the molecular and genetic analysis of a previously uncharacterized gene, rhinoceros (rno), that we propose functions to restrict EGFR signaling in the eye. Loss of rno results in the overproduction of photoreceptors, cone cells, and pigment cells and a corresponding reduction in programmed cell death, all phenotypes characteristic of hyperactivated EGFR signaling. Genetic interactions between rno and multiple EGFR pathway components support this hypothesis. rno encodes a novel but evolutionarily conserved nuclear protein with a PHD zinc-finger domain, a motif commonly found in chromatin-remodeling factors. Future analyses of rno will help to elucidate the regulatory strategies that modulate EGFR signaling in the fly eye.