Hedgehog and Wingless signaling in the Drosophila embryonic epidermis represents one paradigm for organizer function. In patterning this epidermis, Hedgehog and Wingless act asymmetrically, and consequently otherwise equivalent cells on either side of the organizer follow distinct developmental fates. To better understand the downstream mechanisms involved, we have investigated mutations that disrupt dorsal epidermal pattern. We have previously demonstrated that the gene lines contributes to this process. Here we show that the Lines protein interacts functionally with the zinc-finger proteins Drumstick (Drm) and Bowl. Competitive protein-protein interactions between Lines and Bowl and between Drm and Lines regulate the steady-state accumulation of Bowl, the downstream effector of this pathway. Lines binds directly to Bowl and decreases Bowl abundance. Conversely, Drm allows Bowl accumulation in drm-expressing cells by inhibiting Lines. This is accomplished both by outcompeting Bowl in binding to Lines and by redistributing Lines to the cytoplasm, thereby segregating Lines away from nuclearly localized Bowl. Hedgehog and Wingless affect these functional interactions by regulating drm expression. Hedgehog promotes Bowl protein accumulation by promoting drm expression, while Wingless inhibits Bowl accumulation by repressing drm expression anterior to the source of Hedgehog production. Thus, Drm, Lines, and Bowl are components of a molecular regulatory pathway that links antagonistic and asymmetric Hedgehog and Wingless signaling inputs to epidermal cell differentiation. Finally, we show that Drm and Lines also regulate Bowl accumulation and consequent patterning in the epithelia of the foregut, hindgut, and imaginal discs. Thus, in all these developmental contexts, including the embryonic epidermis, the novel molecular regulatory pathway defined here is deployed in order to elaborate pattern across a field of cells.