Dictyostelium is the only non-metazoan with functionally analyzed SH2 domains and studying them can give insights into their evolution and wider potential. LrrB has a novel domain configuration with leucine-rich repeat, 14-3-3 and SH2 protein-protein interaction modules. It is required for the correct expression of several specific genes in early development and here we characterize its role in later, multicellular development. During development in the light, slug formation in LrrB null (lrrB-) mutants is delayed relative to the parental strain, and the slugs are highly defective in phototaxis and thermotaxis. In the dark the mutant arrests development as an elongated mound, in a hitherto unreported process we term dark stalling. The developmental and phototaxis defects are cell autonomous and marker analysis shows that the pstO prestalk sub-region of the slug is aberrant in the lrrB- mutant. Expression profiling, by parallel micro-array and deep RNA sequence analyses, reveals many other alterations in prestalk-specific gene expression in lrrB- slugs, including reduced expression of the ecmB gene and elevated expression of ampA. During culmination ampA is ectopically expressed in the stalk, there is no expression of ampA and ecmB in the lower cup and the mutant fruiting bodies lack a basal disc. The basal disc cup derives from the pstB cells and this population is greatly reduced in the lrrB- mutant. This anatomical feature is a hallmark of mutants aberrant in signaling by DIF-1, the polyketide that induces prestalk and stalk cell differentiation. In a DIF-1 induction assay the lrrB- mutant is profoundly defective in ecmB activation but only marginally defective in ecmA induction. Thus the mutation partially uncouples these two inductive events. In early development LrrB interacts physically and functionally with CldA, another SH2 domain containing protein. However, the CldA null mutant does not phenocopy the lrrB- in its aberrant multicellular development or phototaxis defect, implying that the early and late functions of LrrB are affected in different ways. These observations, coupled with its domain structure, suggest that LrrB is an SH2 adaptor protein active in diverse developmental signaling pathways.