We have characterized two genes from Drosophila melanogaster that encode proteins with POU domains showing a high degree of identity with the human Oct-1 and Oct-2 transcription factors. These POU domain genes, pdm-1 and pdm-2, are expressed at high levels during early embryogenesis and at lower levels throughout the rest of development. Both genes are expressed as two stripes in the presumptive abdominal region during the blastoderm stage, followed by thirteen stripes in the germ band extended stage. This pattern of expression is altered in mutants for a gap gene (hunchback) and a pair-rule gene (fushi tarazu). In later stage embryos, both pdm-1 and pdm-2 are expressed in selected neuroblasts in the ventral nervous system, with higher levels in the three thoracic segments and lower levels in the abdominal segments. The low level of expression in the abdominal segments is maintained by the genes within the bithorax complex (BX-C). We have also identified the cells in the dorsal and lateral clusters of the peripheral nervous system that express pdm-1 and pdm-2, and show that some of these cells derive from lineages that require BX-C functions. Together, these results suggest that previously characterized members of the embryonic regulatory hierarchy specify the patterns of the POU domain gene expression, which, in turn, function during neurogenesis and perhaps in earlier stages.