We characterized a gene, extradenticle, which seems to interact with a specific subset of Drosophila homeo domain proteins, possibly affecting their target specificity. This interpretation is based on an examination of the zygotic and maternal effect phenotypes of extradenticle mutations. In embryos with reduced levels of extradenticle gene product, anterior and posterior segmental transformations occur. Segmental identity in Drosophila is mediated by the products of the Antennapedia and bithorax complexes. These homeo domain proteins are thought to regulate different target genes specifically in each segment, resulting in different morphologies. extradenticle alters segmental identity without affecting the pattern of expression of homeotic genes. Genetic tests demonstrate that in extradenticle mutants, the homeotic proteins are functional and act in their normal segmental domains, yet segmental identities are altered. Even when homeotic proteins are ectopically expressed under the control of a heterologous promoter, extradenticle mutations affect their consequences. Thus, in the absence of sufficient extradenticle product, altered segmental morphology results from alteration of the functional consequences of specific homeo domain proteins, possibly through alterations in their target gene specificity. extradenticle is also expressed maternally. Complete removal of extradenticle, maternally and zygotically, leads to specific alterations in segmentation, many of which result from failure to maintain the expression of the homeo domain protein engrailed.