The developing eye of the fruit fly, Drosophila melanogaster, has become a premier model system for studying the genetic and molecular mechanisms that govern tissue determination. Over the last fifteen years a regulatory circuit consisting of the members of the Pax, Six, Eya and Dach gene families has been identified and shown to govern the specification of a wide range of tissues including the retina of both insects and mammals. These genes are not organized in a simple developmental pathway or cascade in which there is a unidirectional flow of information. Rather, there are multiple feedback loops built into the system rendering its appearance and functionality more in line with the workings of a network. In this review I will attempt to describe the genetic, molecular and biochemical interactions that govern the specification of the Drosophila compound eye. In particular, the primary focus will be on the interactions that have been experimentally verified at the molecular and biochemical levels. During the course of this description I will also attempt to place each discovery in its own historical context. While a number of signaling pathways play significant roles in early eye development this review will focus on the network of nuclear factors that promote retinal determination.