Hox genes encode DNA binding transcription factors that regulate the body plans of metazoans by regulating the expression of downstream target 'realizator genes' that direct morphogenesis and growth. Although some Hox target genes have been identified, the code used by Hox proteins to select regulatory targets remains elusive. This failure is due, in part, to the overlapping and promiscuous DNA binding potential of different Hox proteins. The identification of cofactors that modulate Hox DNA binding specificity suggested that target site selection is specified by composite binding sites in the genome for a Hox protein plus its cofactor. Here we have made use of the fact that the DNA binding specificity of the Drosophila Hox protein Fushi Tarazu (Ftz) is modulated by interaction with its partner, the orphan nuclear receptor Ftz-F1, to carry out a computational screen for genomic targets. At least two of the first 30 potential target genes--apontic (apt) and sulfated (Sulf1)--appear to be bona fide targets of Ftz and Ftz-F1. apt is expressed in stripes within the Ftz domain, but posterior to engrailed (en) stripes, suggesting a parasegmental border-independent function of ftz. Ftz/Ftz-F1 activate Sulf1 expression in blastoderm embryos via composite binding sites. Sulf1 encodes a sulfatase thought to be involved in wingless (Wg) signaling. Thus, in addition to regulating en, Ftz and Ftz-F1 coordinately and directly regulate different components of segment polarity pathways in parallel.