In Drosophila, the Hox gene Abdominal-B is required to specify the posterior abdomen and the genitalia. Homologues of Abdominal-B in other species are also needed to determine the posterior part of the body. We have studied the function of Abdominal-B in the formation of Drosophila genitalia, and show here that absence of Abdominal-B in the genital disc of Drosophila transforms male and female genitalia into leg or, less frequently, into antenna. These transformations are accompanied by the ectopic expression of genes such as Distal-less or dachshund, which are normally required in these appendages. The extent of wild-type and ectopic Distal-less expression depends on the antagonistic activities of the Abdominal-B gene, as a repressor, and of the decapentaplegic and wingless genes as activators. Absence of Abdominal-B also changes the expression of Homothorax, a Hox gene co-factor. Our results suggest that Abdominal-B forms genitalia by modifying an underlying positional information and repressing appendage development. We propose that the genital primordia should be subdivided into two regions, one of them competent to be transformed into an appendage in the absence of Abdominal-B.