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A Drosophila strain was isolated that carries a lacZ-bearing recombinant P element integrated in the cubitus interruptus Dominant (ci-D) locus. This strain expresses beta-galactosidase in the anterior compartments of embryos and imaginal discs, suggesting that expression of ci-D is anterior-compartment specific. DNA from ci-D was cloned. In situ hybridization to imaginal discs confirmed that ci-D RNA is present only in anterior compartments. ci-D RNA is also limited to the anterior compartments at the germ-band extension stage of embryonic development, although not at earlier stages. In engrailed mutants, ci-D expression was derepressed in the posterior compartments of both embryos and imaginal discs. We postulate that engrailed, which is expressed in only the posterior compartments of embryos and imaginal discs, represses ci-D in these cells.