The specification of anterior positional information during Drosophila embryogenesis is largely dependent upon the function of the maternal-effect gene bicoid (bcd). Two aspects of bcd function are particularly striking. First, the bcd protein product forms a gradient during early embryogenesis, which regulates the transcription of at least one zygotic segmentation gene, hunchback, in a concentration dependent manner. Secondly, formation of the bcd protein gradient is dependent upon the specific localization of bcd mRNAs at the anterior end of the oocyte/embryo during oogenesis, a process which requires a cis-acting 625 nucleotide sequence within the 3' untranslated region of the bcd mRNA. We have cloned and sequenced the bcd gene from Drosophila pseudoobscura as a tool in identifying important functional domains within this transcription unit. DNA sequence comparisons reveal: (i) varying degrees of amino acid sequence conservation among the proposed functional domains of the bcd protein, (ii) the conservation of potential RNA secondary structures within the bcd mRNA localization element, and (iii) the maintenance of a short open reading frame within the 5' untranslated leader that may play a role in translational regulation. Finally, the D.pseudoobscura bcd gene partially rescues the phenotype of a bcd- mutation when placed into the D.melanogaster genome by germline transformation. The lack of full phenotypic rescue can be explained in part by the observed improper localization of the D.pseudoobscura bcd mRNA when expressed in D.melanogaster.