Extending our search for homologous domains of the Drosophila paired gene, two closely linked genes at the gooseberry locus have been isolated. Both genes are expressed with a single segment periodicity but with different spatial and temporal expression patterns. While the transcripts of one gene appear earlier and are equally distributed between ectoderm and mesoderm, those of the second gene accumulate preferentially in neuroblasts. The similarity of these expression patterns to the 14-band pattern of the paired gene suggests a functional relationship. Such a functional link may be reflected in the two structurally homologous domains shared with the paired gene: a new type of homeo box extended by 18 amino acids at the 5' end, and a new domain, the paired box, consisting of a sequence of 128-135 amino acids. Thus, together with the PRD repeat, the paired gene contains at least three different domains, each defining a gene set thought to be important for development.