The division of the wing imaginal disc into anterior, posterior, dorsal, and ventral compartments is a critical step in Drosophila wing morphogenesis. Here, we investigate the existence of cell lineage restrictions along the proximal-distal (PD) axis of the wing disc. We rule out the existence of classical compartment boundaries in the hinge region, but demonstrate that there are clonal restrictions corresponding to the expression domains of two transcription factors, Nubbin (Nub) and Teashirt (Tsh), present in distal and proximal cells, respectively. Unlike classical compartments, the Nub and Tsh domains do not define absolute lineage restrictions. Instead, due to regulation by Wingless signaling, the Nub and Tsh expression boundaries shift during development. Once established, the Nub and Tsh domains, and the intervening region in which neither factor is expressed, grow independently, because the progeny of cells present in one domain do not freely populate an adjacent domain. We also show that despite shifting position, the Nub and Tsh domain boundaries, like compartment boundaries, impact the expression of secreted signaling molecules. Thus, like the vein/intervein divisions of the wing and mammalian rhombomeres, the Nub and Tsh domains share some of the attributes of classical compartments, but lack their stringent and immobile boundaries.