Dorsoventral patterning in Drosophila is initiated by the maternal regulatory factor dorsal (dl), which is a member of the Rel family of transcription factors. dl functions as a transcriptional activator and repressor to establish different territories of gene expression in the precellular embryo. Differential regulation of dl target genes may be essential for subdividing each tissue territory (the presumptive mesoderm, neuroectoderm, and dorsal ectoderm) into multiple cell types in older embryos. Different patterns of snail (sna) and decapentaplegic (dpp) expression help define the limits of inductive interactions between the mesoderm and dorsal ectoderm after gastrulation. Similarly, the differential regulation of short gastrulation (sog) and dpp may be decisive in the initial subdivision of the dorsal ectoderm, whereas different limits of gene expression within the neuroectoderm might provide the basis for the subsequent subdivision of this tissue into ventral and lateral regions.