caudal (cad) is a maternally and zygotically expressed gene in Drosophila whereby the two phases of expression can functionally replace each other. The zygotic expression forms an abdominal and a posterior domain, whereby only the posterior domain has so far been studied with respect to its regulation and function. We show here that the abdominal cad domain is regulated by the hunchback (hb) gradient through repression at high concentrations and activation at low concentrations of HB protein. To study the function of the abdominal cad domain in the absence of redundant interactions, we have utilized an experimental system in which the embryo lacks the normal bicoid (bcd) and hb expression. An artificial hb gradient is then introduced into such embryos, which results in an induction of an ectopic zygotic cad domain in the more anterior region. Employing this system, we show that the cad domain functions by activating the expression of the abdominal gap genes knirps (kni) and giant (gt). We conclude that cad is the so far missing region-specific activator of abdominal segmentation genes.