The cut locus acts as a bimodal switch controlling cell fate in the peripheral nervous system of Drosophila and is also required for the development of the wing margin. It encodes a protein, Cut, that contains an atypical homeodomain and three copies of a new motif which can bind DNA in vitro. The human protein CDP and the murine protein Cux have recently been isolated as DNA-binding activities and they are structurally related to Cut. We show that ectopic expression of Cut, CDP, or Cux similarly affects embryonic sensory organ development and can rescue a wing scalloping mutant phenotype associated with loss of cut expression along the prospective wing margins. This suggests that the function of Cut is evolutionarily conserved.