Hox proteins play fundamental roles in generating pattern diversity during development and evolution, acting in broad domains but controlling localized cell diversification and pattern. Much remains to be learned about how Hox selector proteins generate cell-type diversity. In this study, regulatory specificity was investigated by dissecting the genetic and molecular requirements that allow the Hox protein Abdominal A to activate wingless in only a few cells of its broad expression domain in the Drosophila visceral mesoderm. We show that the Dpp/Tgfbeta signal controls Abdominal A function, and that Hox protein and signal-activated regulators converge on a wingless enhancer. The signal, acting through Mad and Creb, provides spatial information that subdivides the domain of Abdominal A function through direct combinatorial action, conferring specificity and diversity upon Abdominal A activity.