How complex networks of activators and repressors lead to exquisitely specific cell-type determination during development is poorly understood. In the Drosophila eye, expression patterns of Rhodopsins define at least eight functionally distinct though related subtypes of photoreceptors. Here, we describe a role for the transcription factor gene defective proventriculus (dve) as a critical node in the network regulating Rhodopsin expression. dve is a shared component of two opposing, interlocked feedforward loops (FFLs). Orthodenticle and Dve interact in an incoherent FFL to repress Rhodopsin expression throughout the eye. In R7 and R8 photoreceptors, a coherent FFL relieves repression by Dve while activating Rhodopsin expression. Therefore, this network uses repression to restrict and combinatorial activation to induce cell-type-specific expression. Furthermore, Dve levels are finely tuned to yield cell-type- and region-specific repression or activation outcomes. This interlocked FFL motif may be a general mechanism to control terminal cell-fate specification.