Loss of function mutations of scabrous and conditional alleles of Notch and Delta affect the pattern of morphogenetic furrow development. By studying differentiation of R8 cells, the first photoreceptor neuron subtype to differentiate, we show that all furrow cells pass through an R8-competent stage. Function of Notch and scabrous is necessary if most of these cells are to attain other cell fates. The scabrous gene confers a regular pattern on the morphogenetic furrow, restricting R8 differentiation to alternating groups of cells. Notch and Delta function to restrict the R8 fate to a single cell in each group. Without scabrous gene function, action of Notch and Delta on the entire morphogenetic furrow results in a disorganised pattern of ommatidia arising from a disorganised array of single R8 cells. Aspects of the scabrous mutant phenotype also suggest a secondary role in selecting a single R8 cell from competent clusters. We show that scabrous expression preceeds changes in the apical profiles of morphogenetic furrow cells that identify ommatidial precurf1p4cells, and also preceeds changes in levels of Notch and Delta expression. The pattern of initiation of sca expression depends on sca gene function, indicating that patterning of the morphogenetic furrow depends on the pattern of posterior columns. Our results suggest that in the eye, Notch and Delta amplify and refine a morphogenetic landscape generated by scabrous. Cell determination in other tissues and organisms might also be molded in a two-step process where initial inhomogeneities determined by one protein provide a context for subsequent development.