The eye-antennal disc of Drosophila gives rise to numerous adult tissues, including the compound eyes, ocelli, antennae, maxillary palps and surrounding head capsule. The fate of each tissue is governed by the activity of unique gene regulatory networks (GRNs). The fate of the eye, for example, is controlled by a set of fourteen interlocking genes called the retinal determination (RD) network. Mutations within network members lead to replacement of the eyes with head capsule. Several studies have suggested that in these instances all retinal progenitor and precursor cells are eliminated via apoptosis and as a result the surrounding head capsule proliferates to compensate for retinal tissue loss. This model implies that the sole responsibility of the RD network is to promote the fate of the eye. We have re-analyzed eyes absent mutant discs and propose an alternative model. Our data suggests that in addition to promoting an eye fate the RD network simultaneously functions to actively repress GRNs that are responsible for directing antennal and head capsule fates. Compromising the RD network leads to the inappropriate expression of several head capsule selector genes such as cut, Lim1 and wingless. Instead of undergoing apoptosis, a population of mutant retinal progenitors and precursor cells adopt a head capsule fate. This transformation is accompanied by an adjustment of cell proliferation rates such that just enough head capsule is generated to produce an intact adult head. We propose that GRNs simultaneously promote primary fates, inhibit alternative fates and establish cell proliferation states.