The Spalt-like family of zinc finger transcription factors is conserved throughout evolution and is involved in fundamental processes during development and during embryonic stem cell maintenance. Although human SALL1 is modified by SUMO-1 in vitro, it is not known whether this post-translational modification plays a role in regulating the activity of this family of transcription factors. Here, we show that the Drosophila Spalt transcription factors are modified by sumoylation. This modification influences their nuclear localization and capacity to induce vein formation through the regulation of target genes during wing development. Furthermore, spalt genes interact genetically with the sumoylation machinery to repress vein formation in intervein regions and to attain the wing final size. Our results suggest a new level of regulation of Sall activity in vivo during animal development through post-translational modification by sumoylation. The evolutionary conservation of this family of transcription factors suggests a functional role for sumoylation in vertebrate Sall members.