Terminal patterning in Drosophila is governed by a localized interaction between the Torso kinase (Tor) and its ligand Trunk (Trk). Currently, it is proposed that Trk must be cleaved in order to bind Tor, and that these proteolytic events are controlled by secretion of Torso-like (Tsl) only at the embryo poles. However, controversy surrounds these ideas since neither cleaved Trk nor a protease that functions in terminal patterning have been identified. Here we show that Trk is cleaved multiple times in vivo and that these proteolytic events are essential for its function. Unexpectedly, however, the Trk cleavage patterns we observe are unaltered in tsl-null mutants. One explanation for these data is that the influence of Tsl on localized Trk cleavage at the embryo poles is subtle and cannot be readily detected. Alternatively, we favour a scenario where Tsl functions post proteolytic processing of Trk to control localized terminal patterning.