The zygotically active tailless (tll) gene plays a key role in the establishment of nonmetameric domains at the anterior and posterior poles of the Drosophila embryo. We have cloned the tll gene and show that it encodes a protein with striking similarity to steroid hormone receptors in both the DNA binding "finger" and ligand binding domains. tll RNA is initially expressed in embryos in two mirror-image symmetrical domains; this pattern then quickly resolves into a pattern consistent with the mutant phenotype: a posterior cap and an anterior dorsal stripe. That the tll gene may also play a role in the nervous system is suggested by its strong expression in the forming brain and transient expression in the peripheral nervous system.