The Drosophila gene buttonhead (btd) is a gap-like head segmentation gene which encodes a triple zinc finger protein structurally and functionally related to the human transcription factor Spl. Here we report the pattern of btd expression during embryogenesis. btd is not only expressed and required in the blastoderm anlagen of the antennal, intercalary and mandibular segments as reported previously, but both expression and requirement extend into the anlage of the maxillary segment. From gastrulation onwards, btd is expressed in distinct spatial and temporal patterns, suggesting that btd might be required for a number of developmental processes beyond head segmentation. In fact, analysis of btd mutant embryos revealed that btd participates in the formation of the peripheral nervous system. However, no other morphologically apparent phenotype was observed. We identified a btd-related gene, termed D-Sp1, which is expressed in temporal and spatial patterns similar to btd during postblastodermal development. No localized expression domains of D-Sp1, which is located in the same X-chromosomal band as btd, were seen during the blastoderm stage. The results suggest that D-Sp1 and btd represent a novel gene pair with partially redundant functions after the blastoderm stage.