The spatial organization of the Drosophila embryo depends on the activity of three axial pattern-forming systems. In addition to the anterior-posterior and dorsal-ventral systems that organize the segmented body plan, a proximal-distal pattern-forming system is required to provide positional information for the developing limbs. The development of both the larval and adult limbs depends directly on the activity of the Distal-less gene. Genetic analysis has shown that Distal-less functions as a developmental switch that is required to promote the development of limb structures above the evolutionary ground-state of body wall. Here we provide genetic evidence that indicates a graded requirement for Distal-less activity during limb development. Reduction of this activity has a global effect on pattern formation in the limb. The molecular structure of the Distal-less locus indicates that the gene encodes a homoeodomain-containing protein which is therefore likely to specify limb development through differential regulation of subordinate genes.