We investigated the expression of segment polarity genes during the development of overgrowing and duplicating imaginal discs in the lethal overgrowth mutant lethal (2) giant discs (l (2) gd) of Drosophila in order to explore the molecular basis of hyperplasia and axis establishment in imaginal discs. The expression of wingless (wg), detected using an enhancer trap, is initially restricted to a ventral sector of the leg disc, as in wild type, but expands toward the opposite end of the disc during overgrowth. In the third leg disc, the expanding wg expression stripe evolves to a new center of wg expression at the site where a duplicate leg is subsequently formed. Expression of decapentaplegic (dpp) also begins normally in l (2) gd discs, but the dpp expression domain expands into the posterior region of the disc where it enlarges to eventually become the center of dpp expression in the duplicate. In l (2) gd homozygotes that are simultaneously homozygous for wg or dpp mutations the leg discs overgrow but do not duplicate. Thus ectopic wg and dpp expression is associated with and appears to be required for disc duplication. The wing discs of l (2) gd homozygotes also show expansion of the wg and dpp expression domains, but in this disc wg and dpp mutations inhibit overgrowth as well as pattern duplication. Our results raise the possibility that hyperplasia in other mutants and in other systems may be caused by the misexpression of genes involved in the generation of positional information.