Molecular cloning has demonstrated that the receptors for steroid, retinoid and thyroid hormones are part of a large superfamily of nuclear regulatory proteins. In vertebrates these molecules regulate diverse biological processes such as pattern formation, cellular differentiation and homeostasis. The universal necessity for embryonic and adult cells to respond to their external environment might mean that members of this family pre-date the divergence of vertebrates and invertebrates. We have screened a Drosophila genomic library for steroid receptor homologues using a human retinoic acid receptor complementary DNA as a hybridization probe. Several clones were recovered, one of which mapped to chromosomal position 77E1-2, the cytological location of the gap segmentation gene knirps. Sequence analysis of a cDNA clone representing the human retinoic acid receptor homologue showed similarity of the predicted protein to the vertebrate steroid receptors, as well as to the predicted knirps gene product. In situ hybridization of a cDNA probe to wild-type embryos revealed a uniform distribution of transcripts that were apparently maternally derived. Zygotic transcript accumulation begins in a broad anteroventral domain before the cellular blastoderm stage. At the cellular blastoderm stage two additional circumferential bands of transcript appear.