During Drosophila embryogenesis, the segment polarity genes are required for the formation of specific pattern domains within each segment. Mutations in the armadillo (arm) gene primarily affect the posterior part of the segment and lead to the production of anterior structures within this region. To examine the molecular basis for these effects, we have cloned the arm region and identified the gene by germ-line transformation. The arm gene produces two types of very abundant 3.2-kb transcripts that differ only in their first exons. These RNAs appear to be formed by independent transcriptional initiation but have similar patterns of expression throughout development. Both arm transcripts are present in virtually all of the cell types contained in embryos, third-instar larvae, and adult ovaries, suggesting that arm may be required in all cells. In addition, the arm transcripts are uniformly distributed in embryonic segments, so the regional pattern defects associated with its embryonic phenotype may result from interactions between arm and other localized factors. Both arm RNAs encode the same 91-kD polypeptide. This protein has no probable secretory or membrane-spanning regions and contains a series of novel internal repeats that are conserved in sequence, length, and spacing. Considering these results and previous genetic observations, we discuss potential roles for the arm gene in pattern formation processes.