High baselines of transcription factor activities represent fundamental obstacles to regulated signaling. Here we show that in Drosophila, quenching of basal activator protein 1 (AP-1) transcription factor activity serves as a prerequisite to its tight spatial and temporal control by the JNK (Jun N-terminal kinase) signaling cascade. Our studies indicate that the novel raw gene product is required to limit AP-1 activity to leading edge epidermal cells during embryonic dorsal closure. In addition, we provide the first evidence that the epidermis has a Basket JNK-independent capacity to activate AP-1 targets and that raw function is required broadly throughout the epidermis to antagonize this activity. Finally, our mechanistic studies of the three dorsal-open group genes [raw, ribbon (rib), and puckered (puc)] indicate that these gene products provide at least two tiers of JNK/AP-1 regulation. In addition to Puckered phosphatase function in leading edge epidermal cells as a negative-feedback regulator of JNK signaling, the three dorsal-open group gene products (Raw, Ribbon, and Puckered) are required more broadly in the dorsolateral epidermis to quench a basal, signaling-independent activity of the AP-1 transcription factor.