The Abd-B Hox gene contains an extended 3' cis-regulatory region that is subdivided into a series of separate lab domains. The lab-7 domain activates Abd-B in parasegment 12 (ps12), whereas lab-8 controls expression in ps13. iab-7 is flanked by two insulators, Fab-7 and Fab-8, which are thought to prevent regulatory factors, such as Polycomb silencers, from influencing neighboring iab domains. This organization poses a potential paradox, since insulator DNAs can work in a dominant fashion to block enhancer-promoter interactions over long distances. Here, we present evidence for a novel cis-regulatory sequence located within lab-7, the promoter targeting sequence (PTS), which permits distal enhancers to overcome the blocking effects of Fab-8 and the heterologous su(Hw) insulator. We propose that the PTS converts dominant, long-range insulators into local regulatory elements that separate neighboring lab domains.