In Drosophila, as in mammals, epidermal differentiation is controlled by si
gnalling cascades' that include Wnt proteins(2,3) and the ovo/shavenbaby (s
vb) family of zinc-finger transcription factor(4-6) Ovo/svb is a complex ge
ne with two genetic functions corresponding to separate control regions: ov
o is required for female germline development and svb for epidermal morphog
enesis(7,8). In the Drosophila embryo, the ventral epidermis consists of th
e segmental alternance of two major cell types that produce either naked cu
ticle or cytoplasmic extrusions known as denticles. Wingless signalling spe
cifies smooth cells that produce naked cuticle(9), whereas the activation o
f the Drosophila epidermal growth factor (EGF) receptor (DER) leads to the
production of denticles(10). Here we show that expression of the ovo/svb ge
ne controls the choice between these cell fates. We find that svb is a key
selector gene that, cell autonomously, directs cytoskeletal modifications p
roducing the denticle. The DER pathway promotes denticle formation by activ
ating svb expression. Conversely, Wingless promotes the smooth cell fate th
rough the transcriptional repression of svb by the bipartite nuclear factor
Armadillo/dTcf. Ou data indicate that transcriptional regulation of svb in
tegrates inputs fi om the Wingless and DER pathways and controls epidermal
differentiation.