This study investigates the role of the homeobox gene Distal-less (Dll) in the development of the legs, antennae, and wings of Drosophila. Lack of Dll function causes a change in the identity of ventral appendage cells (legs and antennae) that often results in the loss of the appendage. Ectopic Dll expression in the proximal region of ventral appendages induces nonautonomous duplication of legs and antennae by the activation of wingless and decapentaplegic. Ectopic Dll expression in dorsal appendages produces transformation into corresponding ventral appendages; wings and halteres develop ectopic legs and the head-eye region develops ectopic antennae. In the wing, the exogenous Dll product induces this transformation by activating the endogenous Dll gene and repressing the wing determinant gene vestigial. It is proposed that Dll induces the development of ventral appendages and also participates in a genetic address that specifies the identity of ventral appendages and discriminates the dorsal versus the ventral appendages in the adult. However, unlike other homeotic genes, Dll expression and function is not defined by a cell lineage border. Dll also performs a secondary and late function required for the normal patterning of the wing.