During development, the imaginal wing disc of Drosophila is subdivided along the proximal-distal axis into different territories that will give rise to body wall (notum and mesothoracic pleura) and appendage (wing hinge and wing blade). Expression of the Iroquois complex (Iro-C) homeobox genes in the most proximal part of the disc defines the notum, since Iro-C(-) cells within this territory acquire the identity of the adjacent distal region, the wing hinge. Here we analyze how the expression of Iro-C is confined to the notum territory. Neither Wingless signalling, which is essential for wing development, nor Vein-dependent EGFR signalling, which is needed to activate Iro-C, appear to delimit Iro-C expression. We show that a main effector of this confinement is the TGFbeta homolog Decapentaplegic (Dpp), a molecule known to pattern the disc along its anterior-posterior axis. At early second larval instar, the Dpp signalling pathway functions only in the wing and hinge territories, represses Iro-C and confines its expression to the notum territory. Later, Dpp becomes expressed in the most proximal part of the notum and turns off Iro-C in this region. This downregulation is associated with the subdivision of the notum into medial and lateral regions.