The Enhancer of split [ E(spl) ] gene complex of Drosophila comprises seven related genes encoding a special type of basic helix–loop–helix proteins, the function of which is to suppress the neural developmental fate. One of these proteins is E(spl) itself. To gain insight into the structural requirements for E(spl) function, we have expressed a large number of deletion variants in transgenic flies. Three protein domains were identified as essential for suppression of bristle development: the carboxyl-terminal tetrapeptide WRPW, the region comprising the putative helix III and helix IV, and the region between helix IV and the WRPW motif. Lack of the basic helix–loop–helix domain, helix III or IV, only partially inhibits the suppressor activity of the protein. Truncated variants that lack all the regions carboxyl-terminal to helix IV elicit the development of additional neural progenitors, and thus act as dominant-negative variants. All these results suggest that E(spl) suppresses neural development by direct interaction with other proteins, such as groucho and the proneural proteins.