We have examined the effects of the insect ecdysteroid, 20-hydroxyecdysone, on the differentiation of neuronal and non-neuronal elements in the developing adult visual system, using in vitro methods in Drosophila. We examined the differentiation of early neuronal markers in the presence and absence of 1 microgram/ml 20-hydroxyecdysone. Immunoreactivity to 22C10, a marker of an early neuronal antigen, as well as to the photoreceptor-specific antibody 24B10, suggests that differentiation of neuronal and photoreceptor antigens does not require 20-hydroxyecdysone. In eye-discs cultured from animals 5 hours after the white prepupa (P + 5), ommochrome pigmentation first appeared after 2 days in 1 microgram/ml 20-hydroxyecdysone, but cultures lacked pigmentation without 20-hydroxyecdysone. Our culture conditions failed to support the formation of the second screening pigment, drosopterins, even with 20-hydroxyecdysone. Eye discs from P + 5 also formed lenses and interommatidial bristles in culture when 20-hydroxyecdysone was added but not in cultures devoid of the hormone. The differentiation of synaptotagmin and the elongation of extending photoreceptor neurites from eye disc fragments both occur in the absence of 20-hydroxyecdysone in cultures, but adding the hormone increased average neurite length. The threshold for enhanced neurite length was less than 125 ng/ml 20-hydroxyecdysone. Eye-disc cultures also developed immunoreactivity to histamine, the photoreceptor transmitter, from synthesis not re-uptake, in both the presence and in the absence of 20-hydroxyecdysone. These findings suggest that photoreceptor axons may be able to release transmitter in vivo both when they grow into the optic lobe and during the subsequent events in synapse formation.