ABSTRACT The nuclear proteins Spalt and Spalt-related belong to a conserved family of transcriptional regulators characterised by the presence of double zinc-finger domains. In the wing, they are regulated by the secreted protein Decapentaplegic and participate in the positioning of the wing veins. Here, we identify regulatory regions in the spalt/spalt-related gene complex that direct expression in the wing disc. The regulatory sequences are organised in independent modules, each of them responsible for expression in particular domains of the wing imaginal disc. In the thorax, spalt and spalt-related are expressed in a restricted domain that includes most proneural clusters of the developing sensory organs in the notum, and are regulated by the signalling molecules Wingless, Decapentaplegic and Hedgehog. We find that spalt/spalt-related participate in the development of sensory organs in the thorax, mainly in the positioning of specific proneural clusters. Later, the expression of at least spalt is eliminated from the sensory organ precursor cells and this is a requisite for the differentiation of these cells. We postulate that spalt and spalt-related belong to a category of transcriptional regulators that subdivide the thorax into expression domains (prepattern) required for the localised activation of proneural genes.