The SH2 domain-containing phosphotyrosine phosphatase Corkscrew (CSW) is an essential component of the signaling pathway initiated by the activation of the sevenless receptor. tyrosine kinase (SEV) during Drosophila eye development We have used genetic and biochemical approaches to identify a substrate for CSW. Expression of a catalytically inactive CSW was used to trap CSW in a complex with a 115 kDa tyrosine-phosphorylated substrate. This substrate was purified and identified as the product of the daughter of sevenless (dos) gene. Mutations of dos were identified in a screen for dominant mutations which enhance the phenotype caused by overexpression of inactive CSW during photoreceptor development. Analysis of dos mutations indicates that DOS is a positive component of the SEV signaling pathway and suggests that DOS dephosphorylation by CSW may be a key event during signaling by SEV.