Trichomes are cytoplasmic extrusions of epidermal cells. The molecular mechanisms that govern the differentiation of trichome-producing cells are conserved across species as distantly related as mice and flies. Several signaling pathways converge onto the regulation of a conserved target gene, shavenbaby (svb, ovo), which, in turn, stimulates trichome formation. The Drosophila ventral epidermis consists of the segmental alternation of two cell types that produce either naked cuticle or trichomes called denticles. The binary choice to produce naked cuticle or denticles is affected by the transcriptional regulation of svb, which is sufficient to cell-autonomously direct denticle formation. The expression of svb is regulated by the opposing gradients of two signaling molecules- the epidermal growth factor receptor (Egfr) ligand Spitz (Spi), which activates svb expression, and Wingless (Wg), which represses it. It has remained unclear how these opposing signals are integrated to establish a distinct domain of svb expression. We show that the expression of the high mobility group (HMG)-domain protein SoxNeuro (SoxN) is activated by Spi,and repressed by Wg, signaling. SoxN is necessary and sufficient to cell-autonomously direct the expression of svb. The closely related protein Dichaete is co-regulated with SoxN and has a partially redundant function in the activation of svb expression. In addition, we show that SoxN and Dichaete function upstream of Wg and antagonize Wg pathway activity. This suggests that the expression of svb in a discreet domain is resolved at the level of SoxN and Dichaete.