The Drosophila teashirt (tsh) gene has an homeotic function which, in combination with HOM-C genes, determines thoracic and abdominal (trunk) identities. Analysis of TSH protein distribution during embryogenesis using a specific polyclonal antibody shows that it is nuclear. The protein is present with regional modulation in several tissues within the trunk, suggesting additional tsh functions to those already studied. We identified a candidate tsh target shared with some HOM-C genes, the modifier of variegation gene modulo (mod). The TSH zinc-finger protein recognizes in vitro two specific sites within a 5' control element of the mod gene which responds in vivo to tsh activity. TSH is therefore a DNA binding protein and might directly control mod expression.