During organogenesis, cell proliferation is followed by the differentiation of specific cell types to form an organ. Any aberration in differentiation can result in developmental defects, which can result in a partial to a near-complete loss of an organ. We employ the Drosophila eye model to understand the genetic and molecular mechanisms involved in the process of differentiation. In a forward genetic screen, we identified, cullin-4 (cul-4), which encodes an E3 ubiquitin ligase, to play an important role in retinal differentiation. During development, cul-4 is known to be involved in protein degradation, regulation of genomic stability, and regulation of cell cycle. Previously, we have reported that cul-4 regulates cell death during eye development by downregulating Wingless (Wg)/Wnt signaling pathway. We found that loss-offunction of cul-4 results in a reduced eye phenotype, which can be due to onset of cell death. However, we found that loss-of-function of cul-4 also affects retinal development by downregulating retinal determination (RD) gene expression. Early markers of retinal differentiation are dysregulated in cul-4 loss of function conditions, indicating that cul-4 is necessary for differentiation. Furthermore, loss-of-function of cul-4 ectopically induces expression of negative regulators of eye development like Wg and Homothorax (Hth). During eye development, Wg is known to block the progression of a synchronous wave of differentiation referred to as Morphogenetic furrow (MF). In cul-4 loss-of-function background, expression of dpp-lacZ, a MF marker, is significantly downregulated. Our data suggest a new role of cul-4 in retinal differentiation. These studies may have significant bearings on our understanding of early eye development.