During tissue patterning, developing fields may be subdivided into several non-overlapping domains by region-specific expression of transcription factors. In Drosophila leg development, the most distal segments, the pretarsus and tarsal segment 5 (ta5), are precisely specified by interactions between tarsus homeobox genes (BarH1 and BarH2) and pretarsus homeobox genes (aristaless, clawless, and Lim1). Here, we demonstrate that trachealess and tango, both encoding bHLH-PAS proteins that are required for the formation of the embryonic tracheal system, are essential for forming two adjacent distal segments of the leg. trachealess is expressed in the pretarsus and ta5, and the concerted action of trachealess and tango seems to modulate the activity of homeobox gene regulatory loops by repressing Bar in the pretarsus and activating Bar in ta5.