The Drosophila disconnected (disco) gene encodes a C(2)H(2)-type zinc finger transcription factor required for the development of the central and peripheral nervous systems. We report that disco participates in a positive feedback loop with the Dll gene, a master regulator of ventral appendage development. Dll function is not only required for proper disco expression in antenna and leg discs, but is also sufficient for ectopic expression of disco in the developing retina and wing imaginal discs. Conversely, disco gene function is required for the maintenance of Dll expression. We show that Dll phenotypes are partially rescued by the up-regulation of disco expression in the Dll domain. Reduction in disco gene function disrupts antenna and leg development, and the phenotypes closely resemble that produced by Dll alleles. These observations demonstrate that disco plays a fundamental role in the Dll-dependent patterning of antenna and leg, perhaps as a regulator of Dll gene expression.