Cell division in animals must be regulated; during development, for example, proliferation often occurs in spatially and temporally restricted patterns(1-3), and loss of mitotic control underlies cancer(4). The epidermal growth factor receptor (EGFR) has been implicated extensively in the control of cell proliferation in metazoans(5-7); in addition, hyperactivity of the EGFR and its three relatives, ErbB2-ErbB4, are implicated in many cancers(8). But little is known about how these receptor tyrosine kinases regulate the cell cycle. In the developing Drosophila melanogaster imaginal eye disc, there is a single patterned mitosis that sweeps across the eye disc epithelium in the third larval instar(9). This 'second mitotic wave' is triggered by EGFR signalling 5 and depends on expression of String, the Drosophila homologue of Cdc25 phosphatase, the ultimate regulator of mitosis in all eukaryotic cells(10-12). Here we show that two antagonistic transcriptional regulators, Pointed, an activator, and Tramtrack69, a repressor, directly regulate the transcription of string. The activity of at least one of these regulators, Pointed, is controlled by EGFR signalling. This establishes a molecular mechanism for how intercellular signalling can control string expression, and thereby cell proliferation.