Cooperative interactions by DNA-binding proteins have been implicated in cell-fate decisions in a variety of organisms. To date, however, there are few examples in which the importance of such interactions has been explicitly tested in vivo. Here, we tested the importance of cooperative DNA binding by the Bicoid protein in establishing a pattern along the anterior-posterior axis of the early Drosophila embryo. We found that bicoid mutants specifically defective in cooperative DNA binding fail to direct proper development of the head and thorax, leading to embryonic lethality. The mutants did not faithfully stimulate transcription of downstream target genes such as hunchback (hb), giant, and Krüppel. Quantitative analysis of gene expression in vivo indicated that bcd cooperativity mutants were unable to accurately direct the extent to which hb is expressed along the anterior-posterior axis and displayed a reduced ability to generate sharp on/off transitions for hb gene expression. These failures in precise transcriptional control demonstrate the importance of cooperative DNA binding for embryonic patterning in vivo.