Specification of cell fates in the nonsegmented terminal regions of developing Drosophila embryos is under the control of a signal transduction pathway mediated by the receptor tyrosine kinase Torso (Tor). Here, we identify tyrosines (Y) 630 and 918 as the major sites of Tor autophosphorylation. We demonstrate that mutation of Y630, a site required for association with and tyrosine phosphorylation of the tyrosine phosphatase Corkscrew, decreases the efficiency of Tor signaling. In contrast, mutation of Y918, a site capable of binding mammalian rasGAP and PLC-gammal, increases Tor signaling. Interestingly, when receptors contain mutations in both the Y630 and Y918 sites, Tor signaling is restored to wild-type levels. These results identify a novel mechanism whereby Tor function is regulated using compensatory signals generated from distinct autophosphorylation sites and reveal an underlying signaling pathway for terminal development.