The product of the zygotically active decapentaplegic (dpp) gene appears to function as a morphogen that specifies positional information in the dorsal half of the Drosophila embryo. The dorsal-specific transcription of dpp is the key step in establishing a morphogen gradient. We demonstrate here that multiple regions within the second intron of the gene cooperate with one another to generate the wild-type level and pattern of dpp transcription. These regions contain both generalized enhancer elements as well as ventral-specific repressor elements. Placed within the context of heterologous promoters, the intron retains its ability to direct general activation and ventral repression. The ventral specific repression of dpp transcription is directly mediated by binding sites for the dorsal (dl) morphogen in the repressor elements. In contrast with the zerknüllt (zen) ventral repressor element, which contains a few high-affinity dl-binding sites, dpp contains multiple relatively low-affinity sites that function together to bring about complete ventral repression. Because dpp and zen have nearly coincident early expression domains, these results indicate that the same boundary of repression can be specified by dl-binding sites of different affinity. We discuss the possibility that unknown factors interact with dl protein to determine the domain of dl-mediated repression.