The segment polarity genes wingless and engrailed are required throughout development of Drosophila. During early embryogenesis, these two genes are expressed in adjacent domains, in an inter-dependent way. Later, their expression is regulated by different mechanisms and becomes maintained by auto-regulation. To dissect the genetic requirements for the initial signaling between wingless and engrailed expressing cells, we have previously used a transgenic Drosophila strain that expresses wingless under the control of the heat shock promoter (HS-wg). Focusing on the later phases of wingless and engrailed regulation, we have now extended these studies, using embryos carrying various combinations of segment polarity mutations and the HS-wg transgene. We confirm some of the existing models of regulation of the expression of wingless and engrailed. In addition, we find that HS-wg embryos require engrailed for induction of ectopic endogenous wingless expression. Signaling from engrailed cells to this novel wingless expression domain is dependent on hedgehog but also on porcupine. We further demonstrate a novel requirement for hedgehog in maintenance of expression of engrailed itself.