We describe the isolation and analysis of the Drosophila fish-hook (fish) gene, which encodes a novel member of the SOX subgroup of High Mobility Group (HMG) domain proteins that exhibit similarity to the mammalian testis determining factor, SRY. The fish gene is initially expressed in a pair-rule-like pattern which is rapidly replaced by strong neuroectoderm expression. fish null mutants exhibit severe segmentation defects, including loss and/or fusion of abdominal denticle belts and stripe-specific defects in pair-rule and segment polarity gene expression.fish mutant embryos also exhibit loss of specific neurons, fusion of adjacent ventral nerve cord ganglia and aberrant axon scaffold organization. These results indicate an essential role for fish in anterior/posterior pattern formation and nervous system development, and suggest a potential function in modulating the activities of gap and pair-rule proteins.