Drosophila photoreceptor cells (R cells) develop from the eye imaginal during the third instar larval stage and acquire their adult morphology during pupation. We show that orthodenticle (otd), a homeobox gene, is required for R-cell morphogenesis during pupation. otdUV-insensitive (otduvi) is a hypomorphic allele of otd that only affects R-cell development. The R-cell rhabdomeres are disorganized in otduvi, and there is a disruption of proximal-distal development in the eye. The otd genomic structure was determined and resulted in the identification of a deletion in the third intron of otduvi. Sequences encompassing this deletion are able to direct expression of the lacZ reporter gene at all stages of the developing visual system, including the photosensitive cells of Bolwig's organ, the ocelli, and the adult eye. The third intron enhancer is the primary regulatory element controlling otd in the R cells and is not under the control of the glass gene.