The Drosophila (fs(1)h) gene encodes small (Fs(1)hS) and large (Fs(1)hL) chromatin-binding BET protein transcription factor isoforms. Zygotic mutations cause either lethality or female sterility, whereas maternal mutations cause segmental deletions and thoracic homeotic transformations. Here, we describe novel fs(1)h embryonic phenotypes: homeosis of the head in zygotic mutants and deletion of head and tail regions in maternal mutants, similar to those caused by dominant torso (tor(D)) alleles. tor activates transcription of tailless (tll) and hückebein (hkb) by means of a canonical Ras pathway, through inactivation of Groucho (Gro), Capicua (Cic) and, possibly, Grainy-head (Grh) repressors. Expression of both tailless and hückebein are de-repressed in fs(1)h maternal mutants, as in tor(D), gro, grh, and cic mutant animals, indicating fs(1)h is also necessary for tll and hkb repression. These data link Ras signaling with modulation of a chromatin-binding transcription factor, Fs(1)h, suggesting a novel mechanism by which Ras can modulate gene expression.