THE Drosophila homologue of the mammalian epidermal growth factor (EGF
) receptor (DER)(1,2) is a receptor tyrosine kinase involved in many s
tages of fly development, including photoreceptor determination, and w
ing-vein formation(3-9). Its primary activating ligand is the Spitz pr
otein(10,11), which is similar to mammalian TGF-alpha (ref. 12), Argos
is a secreted protein that, like Spitz, contains a single EGF motif(1
3-15). It is a repressor of cell determination in the eye, and acts in
other tissues, including the wing(16-18) Because Argos has the opposi
te effects to DER in the eye (the former blocks photoreceptor determin
ation, the latter promotes it) we have tested whether it acts by block
ing the DER pathway, We show that Argos does indeed repress this pathw
ay in vivo and find that, in vitro, Argos protein can inhibit the acti
vation of DER by Spitz, Thus the determination of cells by the DER pat
hway is regulated by a balance between extracellular activating and in
hibiting signals. This is the first in vivo example of an extracellula
r inhibitor of a receptor tyrosine kinase.