In Drosophila oogenesis, patterning of the follicle cells covering the developing oocyte is achieved by inductive signaling. Two major signaling pathways converge to induce a subpopulation of dorsal anterior follicle cells to adopt cell fates which give rise to operculum and dorsal appendages. One of the signals is initiated by the TGF-ß/BMP signaling pathway. Decapentaplegic (Dpp), one of the BMP like ligands in Drosophila, forms a morphogenetic gradient along the AP axis in the follicular epithelium and promotes operculum fate at highest level while moderate levels promote dorsal appendage fate. The second signal is provided by EGF/TGF-alpha like ligand Gurken (Grk) which is locally secreted by from the developing oocyte and forms a gradient along the dorsoventral axis. High concentrations of Grk induce the operculum fate, moderate concentrations the dorsal appendage fate. Clonal analysis shows that in absence of Dpp activity Grk cannot induce any of the dorsal cell fates in the follicular epithelium indicating that Dpp acts as a competence factor for Grk signaling. Moreover, Dpp also restricts the range of Grk signaling. The combined misexpression of Grk and Dpp leads to an expansion of dorsal fates along both the axes. A phenotype could be generated in which all main body follicle cells except those at the termini of the egg chamber were tansformed into operculum fate. The Dpp gradient and its action on target genes is modulated by several inhibitors which themselves are targets of the Dpp and EGF pathways. This results in a complex network of feedback control. Based on its intriguing expression pattern within the follicular epithelium I investigated the function of Drosophila snoN, a member of the Ski family proteins which are known as transcriptional co-factors of TGF-ß signaling in vertebrates. snoN mutant females lay eggs with enlarged operculum while misexpression of snoN in the whole follicular epithelium reduces the operculum size. Thus, SnoN acts as a transcriptional repressor of operculum fate genes. The intracellular Dpp inhibitors, brinker (brk) and daughters against dpp (dad) act together with snoN to regulate the Dpp readout in the follicular epithelium. Loss of function clones for brk, show that brk acts as a transcriptional repressor of operculum fate genes. Interestingly, loss of function clones of the extracellular Dpp inhibitor short gastrulation (sog) lead to a posterior expansion of the dorsal appendage fate indicating that in contrast to its role in the embryo Sog limits the diffusion of Dpp within the follicular epithelium. Like the Dpp pathway, the EGF pathway induced by Grk is modulated by several genes which themselves are targets of both pathways. In particular, the activation of rhomboid (rho) leads to a secondary amplification of the EGF signal which is thought to play an important role in follicle cell patterning. By performing clonal analysis for rho, we disprove this hypothesis and show that that a graded activity of Grk itself is sufficient to induce different dorsal fates and that the amplification is not essential for defining the midline fate