The development of multicellular organisms relies heavily on cell communication. Cells send and receive complex sets of signals, harmonising their growth and differentiation with that of other, often distant, cell populations. In animals, the Epidermal Growth Factor Receptor (EGFR) is an important mediator of cell communication. EGFR activation regulates various developmental events in nematodes, insects and vertebrates. In addition, mutations in human EGFRs have been associated with a number of cancers. In Drosophila, a key event triggering EGFR signalling is the regulated release of the extracellular portion of EGFR ligands. Rhomboid (Rho), an unusual polytopic protease, cleaves the transmembrane, inactive ligand precursor into an active, soluble form. Both the target sequence and Rho s catalytic site are embedded within the membrane bilayer and for this reason the reaction has been described as regulated intramembrane proteolysis. The work presented in this thesis begins with the characterisation of a classical fly mutation, roughoid (ru). Our results indicate that ru acts as a novel, positive regulator of EGFR signalling during eye development in Drosophila. ru was subsequently identified as rhomboid-3, one of seven rhomboid related genes encoded in the fly genome. Unexpectedly, we found that sequences related to Rhomboid are also common in unicellular organisms. A single microbial Rho has been previously studied, the aarA gene from the human pathogen Providencia stuartii. Strikingly, AarA appears to have a corresponding function to that of the Drosophila Rho: it is necessary for the release of a peptide-signal, which mediates cell communication in P. stuartii. AarA was indeed capable of substituting for the fly Rho in vivo. Vice versa, the fly Rho-1 restored the ability of aarA mutant bacteria to produce the extracellular signal mediating cell communication. These results suggest that Rho-mediated proteolysis might represent a very ancient mechanism for cell communication. The Drosophila genome contains seven Rhomboids. We began to investigate the possibility of additional substrates by analyzing the respiratory system phenotype observed in ru/rho-3 mutant embryos. During embryogenesis, specialised tracheal branches target and invade the ventral nerve cord, part of the central nervous system (CNS). In ru/rho-3 mutants, these branches are misrouted, and inappropriately cross the CNS midline. Also in this context Rho-3 functions to activate an EGFR ligand. Yet, the results reveal an unusual role for the pathway in the repulsion of migrating epithelial cells. EGFR ligands act as chemoattractants for a variety of cells in vivo and in vitro, including tumors. Our results provide a proof of principle that the EGFR can also mediate repulsion from the signal source.