The long term objective of this research is to elucidate the molecular mechanisms by which cell proliferation or differentiation is controlled in animal development. Specifically, the research in this grant will use the Drosophila developing retina as a model system to investigate the mechanisms by which developmental signaling pathways such as Notch and cell intrinsic transcription factors such as atonal and daughterless interact to control cell proliferation and differentiation. Atonal is a bHLH family of transcription factor that is required for the initiation of photoreceptor cell differentiation. The induction of atonal in the developing eye requires Notch signaling, a conserved developmental pathway that has diverse roles in normal development. Notch signaling has also been implicated in regulating the cell cycle, however activation of Notch signaling will induce cell proliferation in some cell types while induce cell cycle arrest and differentiation in others. The mechanisms by which Notch signaling leads to cell proliferation or cell cycle arrest in distinct cell types remains elusive. The Drosophila developing retina provides a unique developmental system that is ideally suited for this investigation because of the well-characterize patterns of cell proliferation and the developmental signaling and because of the ease of generating loss or gain of function cell clones that can be precisely identified during development. Furthermore, the eye-specific enhancers for three of Notch's cell proliferation and differentiation targets have been identified. In this grant, we use these reagents to investigate the mechanism by which Notch signaling regulates cell proliferation in the Drosophila developing retina. Specifically, we propose to (1) determine the role of Notch signaling in cell cycle regulation and in the regulation of cyclin E and Dacapo; (2) determine the role of atonal and daughterless in coordinating cell cycle arrest with cell differentiation; and (3) determine the mechanism by which Notch and other developmental signaling pathways regulate atonal expression and cell proliferation or differentiation. Since the Notch pathway is conserved in mammalian systems and is often deregulated in human diseases including cancers, the proposed studies will provide significant new insight into the roles of Notch signaling in developmentally regulated cell proliferation as well as in human cancers. [unreadable] [unreadable]