The segmentation of the proximal-distal axis of the Drosophila melanogaster leg depends on the localized activation of the Notch receptor. The expression of the Notch ligand genes Serrate and Delta in concentric, segmental rings results in the localized activation of Notch, which induces joint formation and is required for the growth of leg segments. We report here that the expression of Serrate and Delta in the leg is regulated by the transcription factor genes dAP-2 and defective proventriculus. Previous studies have shown that Notch activation induces dAP-2 in cells distal and adjacent to the Serrate/Delta domain of expression. We find that Serrate and Delta are ectopically expressed in dAP-2 mutant legs and that Serrate and Delta are repressed by ectopic expression of dAP-2. Furthermore, Serrate is induced cell-autonomously in dAP-2 mutant clones in many regions of the leg. We also find that the expression of a defective proventriculus reporter overlaps with dAP-2 expression and is complementary to Serrate expression in the tarsal segments. Ectopic expression of defective proventriculus is sufficient to block joint formation and Serrate and Delta expression. Loss of defective proventriculus results in localized, ectopic Serrate expression and the formation of ectopic joints with reversed polarity. Thus, in tarsal segments, dAP-2 and defective proventriculus are necessary for the correct proximal and distal boundaries of Serrate expression and repression of Serrate by defective proventriculus contributes to tarsal segment asymmetry. The repression of the Notch ligand genes Serrate and Delta by the Notch target gene dAP-2 may be a pattern-refining mechanism similar to those acting in embryonic segmentation and compartment boundary formation.