Patterning in multi-cellular organisms involves progressive restriction of cell fates by generation of boundaries to divide an organ primordium into smaller fields. We have employed the Drosophila eye model to understand the genetic circuitry responsible for defining the boundary between the eye and the head cuticle on the ventral margin. The default state of the early eye is ventral and depends on the function of Lobe (L) and the Notch ligand Serrate (Ser). We identified homothorax (hth) as a strong enhancer of the Lmutant phenotype of loss of ventral eye. Hth is a MEIS class gene with a highly conserved Meis-Hth (MH) domain and a homeodomain (HD). Hth is known to bind Extradenticle (Exd) via its MH domain for its nuclear translocation. Loss-of-function ofhth, a negative regulator of eye, results in ectopic ventral eye enlargements. This phenotype is complementary to the L mutant phenotype of loss-of-ventral eye. However, if L and hth interact during ventral eye development remains unknown. Here we show that (i) L acts antagonistically to hth, (ii) Hth is upregulated in the L mutant background, and (iii) MH domain of Hth is required for its genetic interaction with L, while its homeodomain is not, (iv) in L mutant background ventral eye suppression function of Hth involves novel MH domain-dependent factor(s), and (v) nuclear localization of Exd is not sufficient to mediate the Hth function in the L mutant background. Further, Exd is not a critical rate-limiting factor for the Hth function. Thus, optimum levels of L and Hth are required to define the boundary between the developing eye and head cuticle on the ventral margin.