A drosophila pair-rule segmentation gene, fushi tarazu (ftz), encodes a protein which is expressed in a characteristic seven-stripe pattern. The promoter sequences that are sufficient for generating this spatially restricted pattern of expression are located within 669 base pairs upstream of the transcription start site. Multiple transcriptional activators and repressors interact with this 'zebra-stripe' promoter unit to bring about the positional specificity of ftz transcription. Here we report that the homoeodomain-containing protein encoded by caudal (cad) is one such regulator. The cad gene product can increase the level of ftz transcription in the posterior half of the embryo by interacting with multiple copies of a TTTATG consensus sequence located in the zebra-stripe unit. This result demonstrates one pathway by which the product of a maternally expressed segmentation gene, expressed in an antero-posterior concentration gradient, can directly regulate the expression of a pair-rule gene.