The function and integrity of photoreceptor cells are dependent upon the creation and maintenance of specialized apical structures: membrane discs/outer segments in vertebrates and rhabdomeres in insects. We performed a molecular and morphological comparison of Drosophila Pph13 and orthodenticle (otd) mutants to investigate the transcriptional network controlling the late stages of rhabdomeric photoreceptor cell development and function. Although Otd and Pph13 have been implicated in rhabdomere morphogenesis, we demonstrate that it is necessary to remove both factors to completely eliminate rhabdomere formation. Rhabdomere absence is not the result of degeneration or a failure of initiation, but rather the inability of the apical membrane to transform and elaborate into a rhabdomere. Transcriptional profiling revealed that Pph13 plays an integral role in promoting rhabdomeric photoreceptor cell function. Pph13 regulates Rh2 and Rh6, and other phototransduction genes, demonstrating that Pph13 and Otd control a distinct subset of Rhodopsin-encoding genes in adult visual systems. Bioinformatic, DNA binding and transcriptional reporter assays showed that Pph13 can bind and activate transcription via a perfect Pax6 homeodomain palindromic binding site and the Rhodopsin core sequence I (RCSI) found upstream of Drosophila Rhodopsin genes. In vivo studies indicate that Pph13 is necessary and sufficient to mediate the expression of a multimerized RCSI reporter, a marker of photoreceptor cell specificity previously suggested to be regulated by Pax6. Our studies define a key transcriptional regulatory pathway that is necessary for late Drosophila photoreceptor development and will serve as a basis for better understanding rhabdomeric photoreceptor cell development and function.