In insects, the boundary between the embryonic head and thorax is formed by the dorsal ridge, a fused structure composed of portions of the maxillary and labial segments. However, the mechanisms that promote development of this unusual structure remain a mystery. In Drosophila, mutations in the Hox genes Sex combs reduced and Deformed have been reported to cause abnormal dorsal ridge formation, but the significance of these abnormalities is not clear. We have identified three mutant allele classes of Cephalothorax, the Tribolium castaneum (red flour beetle) ortholog of Sex combs reduced, each of which has a different effect on dorsal ridge development. By using Engrailed expression to monitor dorsal ridge development in these mutants, we demonstrate that Cephalothorax promotes the fusion and subsequent dorsolateral extension of the maxillary and labial Engrailed stripes (posterior compartments) during dorsal ridge formation. Molecular and genetic analysis of these alleles indicates that the N terminus of Cephalothorax is important for the fusion step, but is dispensable for Engrailed stripe extension. Thus, we find that specific regions of Cephalothorax are required for discrete steps in dorsal ridge formation.