To regulate animal development, complex networks of signaling pathways maintain the correct balance between positive and negative growth signals, ensuring that tissues achieve proper sizes and differentiation patterns. In Drosophila, Dpp, a member of the TGFβ family, plays two main roles during larval eye development. In the early eye primordium, Dpp promotes growth and cell survival, but later on, it switches its function to induce a developmentally-regulated cell cycle arrest in the G1 phase and neuronal photoreceptor differentiation. To advance in the identification and characterization of regulators and targets of Dpp signaling required for retinal development, we carried out an in vivo eye-targeted double-RNAi screen to identify punt (Type II TGFβ receptor) interactors. Using a set of 251 genes associated with eye development, we identified Ago, Brk, CtBP and Dad as negative regulators of the Dpp pathway. Interestingly, both Brk and Ago are negative regulators of tissue growth and Myc activity, and we show that increased tissue growth ability, by overexpression of Myc or CyclinD-Cdk4 is sufficient to partially rescue punt-dependent growth and photoreceptor differentiation. Furthermore, we identify a novel role of CtBP in inhibiting Dpp-dependent Mad activation by phosphorylation, downstream or in parallel to Dad, the inhibitory Smad.