The bicoid (bcd) protein is expressed in an anteroposterior gradient in early Drosophila embryos and controls the zygotic activation of the segmentation gene hunchback (hb) in a broad but precisely bounded anterior domain. Here we show that the hb gene contains multiple regulatory elements that mediate transcriptional activation in response to bcd protein. Further, we demonstrate that the resulting patterns of expression in vivo depend critically on both the bcd gradient profile and the number and quality of these hb elements. Finally, we show that these same elements mediate bcd-dependent transcriptional activation in yeast and that this interaction requires distinct DNA binding and activating regions in the bcd protein. Our results argue that bcd protein normally binds and activates the hb gene in a concentration-dependent fashion, thereby allowing the gradient of bcd protein to dictate where the hb gene is initially turned on in early embryos. They also suggest that the bcd gradient has the instructive capacity to activate other subordinate control genes by the same mechanism, each in a distinct spatial domain according to its affinity for bcd protein.