Mutations in Drosophila homeotic genes lead to the developmental replacement of one normal body part by another. We have examined the mechanism by which a dominant allele of the Antennapedia (Antp) gene causes the antennae to be replaced by legs. Normal Antp gene activity is required for thoracic but not for head development. We demonstrate that the Antp73b inversion mutation results in Antp transcription in the head. Antp transcripts found in this abnormal location are of two types: normal-sized Antp RNAs and fusion RNAs joining Antp exons (including the protein-coding region) to 5' exons from another gene. This foreign gene is normally expressed in the head, suggesting the cause for abnormal activation of Antp. The result is a change of cell identity from head to thorax.