Fushi tarazu (ftz) is one of the Drosophila homeo-box-containing genes required to establish the segmental pattern. Ftz+ transcripts accumulate in cells that form seven equally spaced bands at the blastoderm stage. We have analyzed cis-acting controlling sequences of the ftz gene by germ line transformation. The functional ftz gene includes a transcription unit of 1.9 kb and approximately 6.1 kb of the 5'-flanking sequences. Fusion of the 5'-flanking sequences to the E. coli lacZ gene directs expression of beta-galactosidase in a "zebra" pattern in transformed embryos. The fusion gene is also expressed in certain neuroblasts that contribute to ganglion cells of all segments. Various morphogenetic controlling elements have been identified within the 5'-flanking sequences.