The scalloped (sd) locus of Drosophila melanogaster encodes a protein with a novel DNA binding domain bearing a high degree of similarity to the human transcription factor TEF-1 (Campbell et al., 1992). We demonstrate that sd mutants show defects in response to a number of taste stimuli. Higher stimulus concentrations are required to elicit behavioral responses from mutant larvae and adult flies. The electrophysiological responses of the peripheral taste neurons in the labellum were found to be normal, suggesting that an inability to detect stimuli is not the cause of the mutant phenotype. The range of mutant responses of sd alleles to salt and sugar stimuli define a functional requirement for the gene in the nervous system and provide an assay for the genetic and molecular analysis of this role.