Wnt genes encode putative cell signalling proteins which play crucial roles during development. From a library of DNA fragments associated, in vivo, with Ultrabithorax proteins, we isolated a novel Drosophila Wnt gene, DWnt-4. Neither a paralog nor an ortholog of the gene exist in the current repertoire of full-length Wnt sequences. DWnt-4 maps close (30 kb) to wingless, suggesting that the two Wnt genes derive from a duplication that occurred early in evolution, since they are significantly diverged in sequence and structure. Developmental expression of DWnt-4 partially overlaps that of wingless. The gene is transcribed following a segment polarity-like pattern in the posterior-most cells of each parasegment of the ectoderm, and at two locations that correspond to parasegments 4 and 8 of the visceral mesoderm. The control of DWnt-4 expression in the visceral mesoderm involves a network of regulatory molecules that includes Ultrabithorax and other proteins from the homeotic complex (HOM-C), as well as the TGF-beta decapentaplegic gene product.