Growth and patterning of the Drosophila wing disc depends on the coordinated expression of the key regulatory gene vestigial both in the Dorsal-Ventral (D/V) boundary cells and in the wing pouch. We propose that a short-range signal originating from the core of the D/V boundary cells is responsible for activating EGFR in a zone of organizing cells on the edges of the D/V boundary. Using loss-of-function mutations and ectopic expression studies, we show that EGFR signaling is essential for vestigial transcription in these cells and for making them competent to undergo subsequent vestigial-mediated proliferation within the wing pouch.