Planar polarity is seen in epidermally derived structures throughout the animal kingdom(1,2). In the Drosophila eye, planar polarity is reflected in the mirror-symmetric arrangement of ommatidia (eye units) across the dorsoventral midline or equator; ommatidia on the dorsal and ventral sides of the equator exhibit opposite chirality(3-5). Photoreceptors R3 and R4 are essential in the establishment of the polarity of ommatidia(6-11). The R3 cell is thought to receive the polarizing signal, through the receptor Frizzled (Fz), before or at higher levels then the R4 cell, generating a difference between neighbouring R3 and R4 cells(6,7,9,10). Both loss-of-function and overexpression of Fz in the R3/R4 pair result in polarity defects and loss of mirror-image symmetry(6,7,9,10,12). Here we identify Notch and Delta (Dl) as dominant enhancers of the phenotypes produced by overexpression of fz and dishevelled (dsh), which encodes a signalling component downstream of Fz, and we show that Dl-mediated activation of Notch is required for establishment of ommatidial polarity. Whereas fz signalling is required to specify R3, Notch signalling induces the R4 fate. Our data indicate that Dl is a transcriptional target of Fz/Dsh signalling in R3, and activates Notch in the neighbouring R4 precursor. This two-tiered mechanism explains how small differences in the level and/or timing of Fz activation reliably generate a binary cell-fate decision, leading to specification of R3 and R4 and ommatidial chirality.