Neurogenesis in Drosophila eye imaginal disc is controlled by interactions of positive and negative regulatory genes. The basic helix-loop-helix (bHLH) transcription factor Atonal (Ato) plays an essential proneural function in the morphogenetic furrow to induce the formation of R8 founder neurons. Bar homeodomain proteins are required for transcriptional repression of ato in the basal undifferentiated retinal precursor cells to prevent ectopic neurogenesis posterior to the furrow of the eye disc. Thus, precise regulation of Bar expression in the basal undifferentiated cells is crucial for neural patterning in the eye. We show evidence that Bar expression in the basal undifferentiated cells is regulated by at least three different pathways, depending on the developmental time and the position in the eye disc. First, at the time of furrow initiation, Bar expression is induced independent of Ato by Hedgehog (Hh) signaling from the posterior margin of the disc. Second, during furrow progression, Bar expression is also induced by Ato-dependent EGFR (epidermal growth factor receptor) signaling from the migrating furrow. Finally, once initiated, Bar expression can be maintained by positive autoregulation. Therefore, we propose that the domain of Bar expression for Ato repression is established and maintained by a combination of non autonomous Hh/EGFR signaling pathways and autoregulation of Bar.