The subdivision of the developing field by region-specific expression of genes encoding transcription factors is an essential step during appendage development in arthropod and vertebrates. In Drosophila leg development, the distal-most region (pretarsus) is specified by the expression of homeobox genes, aristaless and Lim1, and its immediate neighbor (distal tarsus) is specified by the expression of a pair of Bar homeobox genes. Here, we show that one additional gene, clawless, which is a homolog of vertebrate Hox11/tlx homeobox gene family and formerly known as C15, is specifically expressed in the pretarsus and cooperatively acts with aristaless to repress Bar and possibly to activate Lim1. Similar to aristaless, the maximal expression of clawless requires Lim1 and its co-factor, Chip. Bar attenuates aristaless and clawless expression through Lim1 repression. Aristaless and Clawless proteins form a complex capable of binding to specific DNA targets, which cannot be well recognized solely by Aristaless or Clawless.