Perturbation in the Dystroglycan (Dg)–Dystrophin (Dys) complex results in muscular dystrophies and brain abnormalities in human. Here we report that Drosophila is an excellent genetically tractable model to study muscular dystrophies and neuronal abnormalities caused by defects in this complex. Using a fluorescence polarization assay, we show a high conservation in Dg–Dys interaction between human and Drosophila. Genetic and RNAi-induced perturbations of Dg and Dys in Drosophila cause cell polarity and muscular dystrophy phenotypes: decreased mobility, age-dependent muscle degeneration and defective photoreceptor path-finding. Dg and Dys are required in targeting glial cells and neurons for correct neuronal migration. Importantly, we now report that Dg interacts with insulin receptor and Nck/Dock SH2/SH3-adaptor molecule in photoreceptor path-finding. This is the first demonstration of a genetic interaction between Dg and InR.