The orthodenticle (ota~ locus of Drosophila is required for embryonic development, and null mutations of otd cause defects in head development and segmental patterning. We show here that otd is necessary for the formation of the embryonic central nervous system (CNS). otd mutations result in the formation of an abnormal neuropil and in the disappearance of identified neurons associated with the midline of the CNS. In addition, otd is allelic to ocelliless (oc), a mutation that causes the

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... n of the ocelli of the adult fly. We have identified a transcription unit corresponding to the otd locus and find that it is expressed early in a stripe near the anterior pole of the cellular blastoderm and later in the region of the CNS from which these neurons normally arise. The predicted otd protein contains a well-conserved homeo domain and is therefore likely to be a transcriptional regulator involved in specifying cell fate both in the embryonic CNS and in the ocelli. [