Growth and patterning during Drosophila wing development are mediated by signaling from its dorsoventral (D/V) organizer. In the metathorax, wing development is essentially suppressed by the homeotic selector gene Ultrabithorax (Ubx) to mediate development of a pair of tiny balancing organs, the halteres. Here we show that expression of Ubx in the haltere D/V boundary down-regulates its D/V organizer signaling compared to that of the wing D/V boundary. Somatic loss of Ubx from the haltere D/V boundary thus results in the formation of a wing-type D/V organizer in the haltere field. Long-distance signaling from this organizer was analyzed by assaying the ability of a Ubx(-) clone induced in the haltere D/V boundary to effect homeotic transformation of capitellum cells away from the boundary. The clonally restored wing D/V organizer in mosaic halteres not only enhanced the homeotic transformation of Ubx(-) cells in the capitellum but also caused homeotic transformation of even Ubx(+) cells in a genetic background known to induce excessive cell proliferation in the imaginal discs. In addition to demonstrating a non-cell-autonomous role for Ubx during haltere development, these results reveal distinct spatial roles of Ubx during maintenance of cell fate and patterning in the halteres.