The sevenless gene encodes a putative protein tyrosine kinase receptor that is required for the proper differentiation of the R7 photoreceptor cells of the Drosophila eye. We have expressed the sevenless protein in Drosophila tissue culture cells and studied its synthesis, processing, and activity. Our results show that the sevenless protein possesses protein tyrosine kinase activity. The protein is first synthesized as a 280-kDa glycoprotein precursor that is subsequently cleaved into 220-kDa amino-terminal and 58-kDa carboxyl-terminal subunits that remain associated by noncovalent interactions. The 220-kDa subunit is glycosylated and contains most of the extracellular portion of the protein, and the 58-kDa subunit is composed of a small portion of the extracellular sequences and the intracellular protein tyrosine kinase domain. This complex is subsequently cleaved into either 49-or 48-kDa carboxylterminal fragments with concomitant degradation of the rest of the protein.The Drosophila compound eye consists of several hundred identical subunits, called ommatidia. Each ommatidium is composed of 8 photoreceptor cells and 12 non-neuronal accessory cells. This precise array of cells develops from an initially unpatterned epithelium during the last larval instar and pupal periods (1, 2). Cells are instructed to appropriate differentiation pathways by signals produced by neighboring cells (3) in a process of progressive recruitment that is not dependent on cell lineage (1, 4). Studies of the nature of these signals and their receptors are crucial to understanding how the eye develops.Mutations that inactivate the sevenless gene cause a single cell, the photoreceptor R7, to be absent from each ommatidium (5). A cell occupies the proper position to become R7 in the developing ommatidium but becomes a lens-secreting cell rather than a photoreceptor cell (6). Studies of ommatidia mosaic for sevenless function have demonstrated that the sevenless gene product is required only in the developing R7 cell (5-7). Thus these observations suggested that the sevenless gene product is required either for the reception of a signal that acts to help specify the fate of the R7 cell or for the proper execution of the pathway that leads to R7 development.Conceptual translation of sevenless cDN-As (8-10) predicts a 288-kDa membrane protein with a large extracellular domain and a cytoplasmic domain possessing extensive homology to protein tyrosine kinases. Such a protein would be well suited for transducing a signal required for R7 differentiation by activation of its intracellular kinase domain in response to binding of a ligand to its extracellular domain. The observation that sevenless protein is expressed in the pre-R7 cell prior to any morphological signs of photoreceptor differentiation is consistent with a role for the sevenless protein in transducing a signal that specifies the R7 fate (11,12).An understanding of the structure and activity of the sevenless protein is a prerequisite for understanding the molecular mechanis...