In vertebrate embryos, the homeobox gene goosecoid (gsc) is expressed in the gastrula organizer region and in later arising embryonic tissues including the foregut anlage. Ectopic expression and loss-of-function studies have demonstrated that Xenopus gsc elicits a dorsalizing activity that contributes to body axis formation. Here we report that the gsc gene is conserved in invertebrates. In Drosophila, D-gsc is expressed most strongly in the foregut anlage, which gives rise to the foregut proper and the stomatogastric nervous system (SNS). D-gsc expression overlaps with one of the three SNS precursor groups invaginating from the foregut anlage. Embryos mutant for D-gsc gastrulate normally but show disrupted invagination in the SNS primordium and lack one specific SNS ganglion. In addition, D-gsc mutant embryos show a less well defined defect in foregut arrangement. Our results indicate that this invertebrate homolog of gsc is not required for gastrulation but plays a role in neurogenesis in post-gastrula Drosophila embryos.