Receptor tyrosine kinase (RTK) signaling plays an instructive role in cell fate decisions, whereas Notch signaling is often involved in restricting cellular competence for differentiation. Genetic interactions between these two evolutionarily conserved pathways have been extensively documented. The underlying molecular mechanisms, however, are not well understood. Here, we show that Yan, an Ets transcriptional repressor that blocks cellular potential for specification and differentiation, is a target of Notch signaling during Drosophila eye development. The Suppressor of Hairless (Su[H]) protein of the Notch pathway is required for activating yan expression, and Su(H) binds directly to an eye-specific yan enhancer in vitro. In contrast, yan expression is repressed by Pointed (Pnt), which is a key component of the RTK pathway. Pnt binds specifically to the yan enhancer and competes with Su(H) for DNA binding. This competition illustrates a potential mechanism for RTK and Notch signals to oppose each other. Thus, yan serves as a common target of Notch/Su(H) and RTK/Pointed signaling pathways during cell fate specification.