We used immunofluorescence microscopy to investigate mechanisms governing the establishment of cell-specific gene transcription during sporulation in the bacterium Bacillus subtilis. The transcription factors sigma E and sigma F are synthesized shortly after the start of sporulation but do not become active in directing gene transcription until after polar division, when the activity of sigma E is confined to the mother cell and the activity of sigma F is restricted to the forespore. We show that shortly after septation, sigma E and its proprotein precursor pro-sigma E appear to be absent from the forespore and that a null mutation in spoIIIE, a gene known to be required for the translocation of a chromosome into the forespore, allows sigma E and/or pro-sigma E to persist and sigma E to become active in the forespore. These findings suggest that the loss of sigma E/pro-sigma E from the forespore contributes to the compartmentalization of sigma E-directed gene transcription. We also investigated the distribution of SpoIIE, a regulatory phosphatase required for the activation of sigma F which exhibits a bipolar pattern of localization shortly after the start of sporulation. Normally, SpoIIE rapidly disappears from the sporangium, first from the mother-cell pole and then from the forespore pole. Here we show that a null mutation in spoIIIE causes the SpoIIE phosphatase to persist at both poles. The persistence of the SpoIIE phosphatase at the mother-cell pole could explain the lack of compartmentalization of sigma F activity observed in a spoIIIE null mutant. We conclude that the establishment of cell-specific gene transcription involves the loss of sigma E/pro-sigma E from the forespore and the loss of the SpoIIE phosphatase from the mother-cell pole and that both processes are dependent upon the SpoIIIE protein.