Phosphatidylinositol (PI) phosphates (PIPs) are membrane lipids that regulate an array of cellular processes by recruiting effector proteins to specific membranes, as well as orchestrating membrane function and identity. Phosphatidylinositol 4-phosphase (PI4P) is one of the most abundant cellular PIPs. PI4P is produced by PI 4-kinases (PI4Ks) and kept in check by a sole, highly conserved phosphatase called Sac1. Studies in yeast and cultured mammalian cells have implicated Sac1 in a variety of cellular processes, including membrane trafficking, cytoskeletal dynamics, sphingolipid production and lipid homeostasis. However, because Sac1 is essential in multicellular organisms, it has been difficult to determine its contribution to development and homeostasis in vivo. To this end, I used a temperature-sensitive allele of sac1 (sac1ts) in Drosophila melanogaster to study the role of Sac1. Using this allele, I discovered that Sac1 is required for proper Drosophila eye formation and function, as well as for normal oogenesis. In the developing pupal retina, Sac1 is essential for patterning and specification of retinal cell precursors. Within these cells, Sac1 is important for microtubule (MT) stability and organization, transmembrane protein distribution and degradation, as well as endoplasmic reticulum (ER) homeostasis. Moreover, Sac1 loss leads to increased intracellular PI4P and decreased plasma membrane (PM) PI 4,5-bisphosphate PI(4,5)P2. The elevated pool of PI4P in sac1ts mutants is likely produced by the type II PI4K (PI4KII), since deletion of PI4KII can suppress Sac1 loss of function phenotypes, including defects in retinal cell patterning and eye formation. This indicates that Sac1 and PI4KII regulate a pool of PI4P that is required for Drosophila eye development. Proper regulation of PI4P by Sac1 and PI4KII is also required for eye pigmentation in adult flies. PI4KIIΔ or sac1ts mutants exhibit reduced pigment levels and fewer pigment granules (PGs) per ommatidium. Thus, PG biogenesis is highly sensitive to alterations in PI4P. Together, my results highlight the importance of Sac1 during development and provide a sensitized model for future studies.