In Drosophila, Engrailed is a nuclear regulatory protein with essential roles during embryonic development. Although Engrailed is a transcription factor, little progress has been achieved in identifying its target genes. We report here the identification of an effector gene, the beta3-tubulin gene, as a direct target of Engrailed. The cytological location of beta3-tubulin, 60C, is a strong site of Engrailed binding on polytene chromosomes. Immunostaining analysis of a transgenic line containing a P[beta3-tubulin-lacZ] construct shows an additional site of Engrailed binding at the location of the transgene. Molecular analysis allowed identification of several Engrailed binding sites, both in vitro and in vivo, within the first intron of the beta3-tubulin locus. Engrailed binding sites identified in vitro are active in larvae. Furthermore, expression of beta3-tubulin is derepressed in the ectoderm of engrailed mutant embryos. Repression of beta3-tubulin by Engrailed is also obtained when Engrailed is ectopically expressed in embryonic mesoderm. Finally, two different sets of Engrailed binding sites are shown to be involved in the early and late regulation of beta3-tubulin by Engrailed during embryogenesis.