The multigenic Wnt family encode secreted signalling molecules with important regulatory functions in various developmental processes. This paper reports an analysis of the relationships, in terms of structure, expression and function, that exist between the Drosophila genes wingless, the orthologue of the mammalian Wnt1 proto-oncogene, and DWnt4, a new member of the Wnt family. The 2 genes are physically clustered, are transcribed in overlapping embryonic territories under the control of the same regulatory molecules. Co-expression and co-regulation suggest first, that the close physical linkage results from the sharing of cis-control elements and second, that the 2 Wnt signals cooperate in developmental patterning events. Antisense RNA experiments revealed that signalling by DWnt4 is essential for cells from the anterior compartment of each parasegment to adopt a denticled fate. We propose that wingless and DWnt4 achieve opposite, but complementary functions in intrasegmental cell patterning of the embryonic ectoderm.