The roughest locus of Drosophila melanogaster encodes a transmembrane protein of the immunoglobulin superfamily required for several developmental processes, including axonal pathfinding in the developing optic lobe, mechanosensory bristle differentiation and myogenesis. In the compound eye, rst was previously shown to be required for establishing the correct number and spacing of secondary and tertiary pigment cells during the final steps of ommatidial assembly. We have further investigated its function in the developing pupal retina by performing a developmental and molecular analysis of a novel dominant rst allele, rst(D). In addition to showing evidence that rst(D) is a regulatory mutant, the results strongly suggest a previously unnoticed role of the rst gene in the differentiation of secondary/tertiary pigment cell fate as well as establishing the correct timing of surplus cell removal by programmed cell death in the compound eye.