The pannier (pnr) gene of Drosophila melanogaster encodes two isoforms that belong to the family of GATA transcription factors. The isoforms share an expression domain in the wing discs where they exhibit distinct functions during regulation of the proneural achaete/scute (ac/sc) genes. We previously identified two regions in the pnr locus that drive reporter expression in transgenic lines in patterns that recapitulate the essential features of expression of the two isoforms. Here, we identify promoter regions driving isoform expression, showing that pnr-α regulatory sequences are close to the transcription start site while pnr-β expression requires functional interactions between proximal and distal regulatory elements. We find that the promoter domains necessary for reporter expression also mediate autoregulation of Pnr-β and repression of pnr-α by Pnr-β. The cofactor U-shaped (Ush), which is known to down-regulate the function of Pnr during thorax patterning postranscriptionally, in addition represses pnr-β required for ac/sc activation. Moreover, Ush negatively regulates its own expression, while the pnr isoforms positively regulate ush. Our study uncovers complex transcriptional interactions between the pnr isoforms and the cofactor Ush that may be important for regulation of proneural expression and thorax patterning.