The expression pattern and DNA sequence of a newly identified gene, CNC (cap'n'collar), suggest a role for this gene in cephalic patterning during Drosophila embryogenesis. In situ hybridization reveals transcripts localized to the mandibular segment and the hypopharyngeal and labral primordia first detectable in late blastoderm stages. Sequence analysis of cDNA clones from the CNC locus shows the CNC gene product to be related to transcription factors of the leucine zipper (bZIP) class. Based on its protein sequence, we propose that CNC is a subunit of a heterodimeric regulatory protein involved in the control of head morphogenesis.