Hox genes have large expression domains yet control the formation of fine pattern elements at specific locations. We have examined the mechanism underlying subdivision of the abdominal-A (abdA) Hox domain in the visceral mesoderm. AbdA directs formation of an embryonic midgut constriction at a precise location within the broad and uniform abdA expression domain. The constriction divides the abdA domain of the midgut into two chambers, the anterior one producing the Pointed (Pnt) ETS transcription factors and the posterior one the Odd-paired (Opa) zinc finger protein. Transcription of both pnt and opa is activated by abdA but the adjacent non-overlapping patterns are not due to mutual opa-pnt regulation. Near the anterior limit of the abdA domain, two signals, Dpp (a TGFbeta) and Wg (a Wnt), are produced, in adjacent non-overlapping patterns, under Hox control in mesoderm cells. The two signals are known to regulate local mesodermal cell fates and to signal to the endoderm. We find that, in addition, they precisely subdivide the abdA domain: Wg acts upon anterior abdA domain cells to activate pnt transcription, while Dpp is essential in the same region to prevent abdA from activating opa transcription. pnt activation is required to determine the appropriate numbers of mesodermal cells in the third midgut chamber.