The isolation, identification and structure of the spalt gene is described. This novel homeotic gene of Drosophila is required for the establishment of the posterior-most head and the anterior-most tail segments of the embryo. It encodes a small mRNA of 0.8 kb which is under the control of over 15 kb of upstream sequences as indicated by the phenotype of transformed embryos. The putative spalt protein contains internal repeats and other interesting structural motifs but no homeo box. The spalt transcript accumulates motifs but no homeo box. The spalt transcript accumulates to high levels in the segmental anlagen affected in mutant embryos but is also found in regions of the embryo where no functional requirement has been demonstrated.