Parasegmental boundaries in the Drosophila embryo are delimited by the products of the fushi tarazu (ftz) and even-skipped (eve) genes. We show here that these act through particular key control regions of the homeotic gene Ultrabithorax (Ubx) to generate ftz- or eve-like stripe patterns of beta-galactosidase expression. Footprint analysis and tests in transformed embryos of constructs bearing mutated footprint regions suggest that ftz protein acts directly as a transcriptional activator of Ubx. Its activity outside the Ubx expression domain is suppressed by hunchback (hb), a repressor of Ubx. Some DNA binding sites for ftz protein are adjacent to, others overlap binding sites for hb protein, and we provide evidence that ftz protein competes with hb protein for DNA binding and/or for transcriptional activation. This competition mechanism results in a sharp anterior expression boundary. Direct activation of homeotic gene control regions by ftz (or eve) protein may be a regulatory step which is generally used to align expression of homeotic genes with parasegmental boundaries.