The genetic loci fushi tarazu (ftz), hairy (h), and engrailed (en) must be expressed during embryogenesis for the correct segmental organization of the Drosophila embryo to be established. Transcripts from these genes accumulate in periodic patterns at the blastoderm stage of development. We demonstrate that generation of the normal pattern of ftz RNA requires the h+ function whereas formation of the h pattern does not require the ftz gene. In addition, we show that the en pattern is altered in both h and ftz mutant embryos. The nature of these changes and the cuticular phenotype of h mutant larvae suggest that both h and ftz phenotypes are a consequence of incorrect compartmentalization and that the effect of h is mediated via ftz and other genes.