During organogenesis in all multi-cellular organisms, axial patterning is required to transform a single layer organ primordium into a three-dimensional organ. The Drosophila eye model serves as an excellent model to study axial patterning. Dorso-ventral (DV) axis determination is the first lineage restriction event during axial patterning of the Drosophila eye. The early Drosophila eye primordium has a default ventral fate, and the dorsal eye fate is established by onset of dorsal selector gene pannier (pnr) expression in a group of cells on the dorsal eye margin. The boundary between dorsal and ventral compartments called the equator is the site for Notch (N) activation, which triggers cell proliferation and differentiation. This review will focus on (1) chronology of events during DV axis determination; (2) how early division of eye into dorsal and ventral compartments contributes towards the growth and patterning of the fly retina, and (3) functions of DV patterning genes. Developmental Dynamics 241:69–84, 2012. © 2011 Wiley Periodicals, Inc.