The region-specific homeotic gene spalt is involved in the specification of terminal versus trunk structures during early Drosophila embryogenesis. Later in development spalt activity participates in specific processes during organogenesis and larval imaginal disc development. The multiple functions of spalt are reflected in distinct spatio-temporal expression patterns throughout development. Here we show that spalt cis-regulatory sequences for region-specific and organ-specific expression are clustered. Their organization may provide the structural basis for the diversification of expression pattern within the spalt/spalt related/spalt adjacent gene complex. We also examined the transacting factor requirement for the blastodermal spalt expression domains. They are under the genetic control of maternal and gap gene products and we show that these products are able to bind to corresponding spalt cis-acting sequences in vitro. The results suggest that the transacting factors, as defined by genetic studies, functionally interact with the spalt regulatory region. In addition, we provide evidence that a zygotic gene product of the terminal system, Tailless, cooperates with the maternal gene product Caudal and thereby activates gene expression in the terminal region of the embryo.