Drosophila Spitz is a homolog of transforming growth factor alpha (TGF-alpha) and is an activating ligand for the EGF receptor (Egfr). It has been shown that Star is required for Spitz activity. Here we show that Star is quantitatively limiting for Spitz production during eye development. We also show that Star and Spitz proteins colocalize in Spitz sending cells and that this association is not coincident with the site of translation--consistent with a function for Star in Spitz processing or transmission. Finally, we have defined minimal sequences within both Spitz and Star that mediate a direct interaction and show that this binding can occur in vivo.