The Drosophila wing imaginal disc gives rise to three body parts along the proximo-distal (P-D) axis: the wing blade, the wing hinge and the mesonotum. Development of the wing blade initiates along part of the dorsal/ventral (D/V) compartment boundary and requires input from both the Notch and wingless (wg) signal transduction pathways. In the wing blade, wg activates the gene vestigial (vg), which is required for the wing blade to grow. wg is also required for hinge development, but wg does not activate vg in the hinge, raising the question of what target genes are activated by wg to generate hinge structures. Here we show that wg activates the gene homothorax (hth) in the hinge and that hth is necessary for hinge development. Further, we demonstrate that hth also limits where along the D/V compartment boundary wing blade development can initiate, thus helping to define the size and position of the wing blade within the disc epithelium. We also show that the gene teashirt (tsh), which is coexpressed with hth throughout most of wing disc development, collaborates with hth to repress vg and block wing blade development. Our results suggest that tsh and hth block wing blade development by repressing some of the activities of the Notch pathway at the D/V compartment boundary.