Physiological responses are the ultimate outcomes of the functional interactions and proper organization of the different cell types that make up an organ. The digestive tract represents a good example where such structure/function correlation is manifested. To date, the molecular mechanisms that establish and/or maintain gut segmentation and functional specialization remain poorly understood. Recently, the use of model systems such as Drosophila has enriched our knowledge about the gut organization and physiology. Here, we review recent studies deciphering the morphological and functional properties of the Drosophila adult midgut compartments. Intestinal compartments are established through the differentiation of regionalized stem cell populations in concert with the joint activity of patterned transcription factors and locally produced morphogens. The maintenance of a compartmentalized gut structure is vital to the organism, allowing sequentially the ingestion and digestion of food, absorption of nutrients, and excretion of waste products in addition to the compartmentalization of immune and homeostatic functions. Further characterization of the gene regulatory networks underlying gut compartmentalization will pave the way for a better understanding of gastrointestinal function in insects and mammals, in both health and disease conditions.