We used in situ hybridization to study expression of the DER gene during Drosophila development. DER encodes a transmembrane cell-surface receptor with a cytoplasmic protein-tyrosine kinase domain, and resembles the vertebrate genes that encode the EGF receptor and the neu protein. We examined most stages of development in the Drosophila life cycle and found a substantial correlation between DER expression and the phenotypes associated with a variety of mutant alleles. Of particular note were high levels of expression in the primordia of the mouth parts, which are the embryonic tissues most sensitive to reductions in DER activity; discrete expression in a subset of neural cells essential for construction of the axonal scaffold, a structure that is deformed in mutant embryos; uneven expression in the eye disc, the development of which is abnormal in both mild hypomorphs and hypermorphs; and expression in the follicular epithelial cells of the ovary, which are responsible for producing the eggshell of developing oocytes and do so aberrantly in the mildest hypomorphs. However, DER transcripts were also detected in a subset of tissues that have not been reported to be abnormal in mutant organisms. Our findings agree with and extend recently reported results for the DER protein, indicating that DER is regulated primarily at the level of transcription, in contrast to previous suggestions. We conclude that the phenotypes displayed by recessive mutants can be attributed to loss of DER function in the affected tissues.