Homeotic (Hox) genes code for principal transcriptional regulators of animal body regionalization. The duplication and divergence of Hox genes, changes in their regulation, and changes in the regulation of Hox target genes have all been implicated in the evolution of animal diversity. It is not known whether Hox proteins have also acquired new activities during the evolution of specific lineages. Amino-acid sequences outside the DNA-binding homeodomains of Hox orthologues diverge significantly. These sequence differences may be neutral with respect to protein function, or they could be involved in the functional divergence of Hox proteins and the evolutionary diversification of animals. Here, we identify a transcriptional repression domain in the carboxy-terminal region of the Drosophila Ultrabithorax (Ubx) protein. This domain is highly conserved among Ubx orthologues in other insects, but is absent from Ubx in other arthropods and onychophorans. The evolution of this domain may have facilitated the greater morphological diversification of posterior thoracic and anterior abdominal segments characteristic of modern insects.