Pair-rule gene hairy (h) expression in seven evenly spaced stripes, along the longitudinal axis of the Drosophila blastoderm embryo, is mediated by a modular array of separate stripe enhancer elements. The minimal enhancer element, which generates reporter gene expression in place of the most posterior h stripe 7 (h7-element), contains a dense array of binding sites for factors providing the trans-acting control of h stripe 7 expression as revealed by genetic analyses. The h7-element mediates position-dependent gene expression by sensing region-specific combinations and concentrations of both the maternal homeodomain transcriptional activators, Caudal and Bicoid, and of transcriptional repressors encoded by locally expressed zygotic gap genes. Caudal and Bicoid, which form complementing concentration gradients along the longitudinal axis of the embryo, function as redundant activators, indicating that the anterior determinant Bicoid is able to activate gene expression in the most posterior region of the embryo. The spatial limits of the h stripe-7 domain are brought about by the local activities of repressors which prevent activation. The results suggest that the gradients of Bicoid and Caudal combine their activities to activate segmentation genes along the entire axis of the embryo.