During pupation, long-range order is imposed on the autonomously developing ommatidia which compose the Drosophila eye. To accomplish this, eight additional cell types arise: the primary, secondary, and tertiary pigment cells, and the four cells that form the bristle. These cells form an interweaving lattice between ommatidia. The lattice is refined when excess cells are removed to bring neighboring ommatidia into register. Recent evidence suggests that in larval development, local contacts direct cell fate. The same appears to be true during pupal development: the contacts a cell makes predict the cell type it will become. Cells which contact the anterior or posterior cone cells in an ommatidium invariably become primary pigment cells. Cells which contact primary pigment cells from different ommatidia become secondary and tertiary pigment cells. Bristle development is in several ways distinct from ommatidial development. The four cells of each bristle group appear to be immediate descendents of a single founder cell. During their early differentiation, they do not make stereotyped contacts with surrounding ommatidial cells, but do make particular contacts within the bristle group. And unlike the surrounding ommatidia, differentiation of the bristles radiates from the center of the eye to the edges. As cells are removed during two stages of programmed cell death, the bristles are brought into their final position. When all cells in the lattice have achieved their final position, a second stage of retinal development begins as structures specific to each cell type are produced. This paper follows these various stages of pupal development, and suggests how local cell-cell contacts may produce the cells needed for a functional retina.