The Drosophila Pax-6 gene eyeless acts high up in the genetic hierarchy involved in compound eye development and can direct the formation of extra eyes in ectopic locations, Here we identify sine oculis and eyes absent as two mediators of the eye-inducing activity of eyeless, We show that eyeless induces and requires the expression of both genes independently during extra eye development. During normal eye development, eyeless is expressed earlier than and is required for the expression of sirte oculis and eyes absent, but not vice versa. Based on the results presented here and those of others, we propose a model in which eyeless induces the initial expression of both sine oculis and eyes absent in the eye disc. sine oculis and eyes absent then appear to participate in a positive feedback loop that regulates the expression of all three genes. In contrast to the regulatory interactions that occur in the developing eye disc, we also show that in the embryonic head, sine oculis acts in parallel to eyeless and twin of eyeless, a second Pax-6 gene from Drosophila, Recent studies in vertebrate systems indicate that the epistatic relationships among the corresponding vertebrate homologs are very similar to those observed in Drosophila.