INTRODUCTION The Drosophila thorax is covered by two different types of sensory organs, macrochaetae and microchaetae, distributed in a characteristic pattern. They are formed by the progeny of epidermal cells specified during larval (macrochaetae) and pupal (microchaetae) development in the presumptive thorax of the wing disc (Campuzano and Modolell, 1992). The immediate sensory organ precursor (SOP) cells are singled out amongst a cluster of potential precursor cells by the activity of the proneural genes achaete and scute, two genes that encode basic helix-loop-helix proteins (bHLH; Campuzano and Modolell, 1992). Position-specific enhancers (Ruiz-Gómez and Modolell, 1987; Gómez-Skarmeta et al., 1995) direct expression of both achaete and scute in clusters of cells at positions that prefigure the pattern of sensory organs. The identification of genetic elements participating in the regulation of achaete and scute is therefore a critical step in understanding the generation of the pattern of sensory organs. It is thought that achaete and scute expression is regulated in individual proneural clusters by the combinatorial effect of several genes that constitute a ‘prepattern’ of transcriptional regulators (Stern, 1954; Modolell and Campuzano, 1998). Several genes, such as the iroquois gene complex and pannier, have been found to be members of this postulated prepattern. They are expressed in the thorax in restricted domains which, individually, are broader than the proneural clusters (Gómez- Skarmeta et al., 1996; Haenlin et al., 1997). The overall growth of the wing disc is under the control of several signalling molecules encoded by hedgehog (hh), wingless (wg) and decapentaplegic (dpp) (Blair, 1995). These genes also play critical roles during the patterning of sensory organs (Phillips and Whittle, 1993; Mullor et al., 1997), although their effects on achaete and scute expression might be mediated by transcriptional regulators downstream of these signalling molecules. In the patterning of veins, Hh activates the expression of the homeobox genes of the iroquois gene complex in the presumptive region of the L3 vein (Gómez- Skarmeta and Modolell, 1996) and Dpp activates the expression of the structurally related genes spalt (sal) and spalt-related (salr) in a central domain in the wing (de Celis et al., 1996; Nellen et al., 1996; Lecuit et al., 1996). sal and salr encode transcription factors with spaced sets of double zinc-finger motifs (Kühnlein et al., 1994; Barrio et al., 1996) and participate in the correct spacing of the wing veins (de Celis et al., 1996). Elimination of both genes during development of the wing results in phenotypes that are stronger than those resulting from elimination of only sal, suggesting that the genes have complementary roles. sal and salr are also expressed in other regions of the wing disc that correspond to the presumptive thorax, hinge and pleura, but their roles there have not been yet established. 2653 Development 126, 2653-2662 (1999) Printed in Great Britain © The Company of Biologists Limited 1999 DEV7690 The nuclear proteins Spalt and Spalt-related belong to a conserved family of transcriptional regulators characterised by the presence of double zinc-finger domains. In the wing, they are regulated by the secreted protein Decapentaplegic and participate in the positioning of the wing veins. Here, we identify regulatory regions in the spalt/spalt-related gene complex that direct expression in the wing disc. The regulatory sequences are organised in independent modules, each of them responsible for expression in particular domains of the wing imaginal disc. In the thorax, spalt and spalt-related are expressed in a restricted domain that includes most proneural clusters of the developing sensory organs in the notum, and are regulated by the signalling molecules Wingless, Decapentaplegic and Hedgehog. We find that spalt/spalt- related participate in the development of sensory organs in the thorax, mainly in the positioning of specific proneural clusters. Later, the expression of at least spalt is eliminated from the sensory organ precursor cells and this is a requisite for the differentiation of these cells. We postulate that spalt and spalt-related belong to a category of transcriptional regulators that subdivide the thorax into expression domains (prepattern) required for the localised activation of proneural genes. Key words: spalt, Gene regulation, Sensory organ development, Drosophila SUMMARY Regulation of the spalt/spalt-related gene complex and its function during sensory organ development in the Drosophila thorax José F. de Celis 1, *, Rosa Barrio 2 and Fotis C. Kafatos 2 1 Department of Genetics, University of Cambridge, Downing Street, Cambridge CB2 3EH, UK 2 European Molecular Biology Laboratory, Meyerhofstrasse, 69117 Heidelberg, Germany *Author for correspondence (e-mail: jdc@mole.bio.cam.ac.uk) Accepted 7 April; published on WWW 19 May 1999