The sequence of a cDNA from the giant gene of Drosophila shows that its product has a basic domain followed by a leucine zipper motif. Both features contain characteristic conserved elements of the b-ZIP family of DNA-binding proteins. Expression of the gene in bacteria or by in vitro translation yields a protein that migrates considerably faster than the protein extracted from Drosophila embryos. Treatment with phosphatase shows that this difference is due to multiple phosphorylation of the giant protein in the embryo. Ectopic expression of the protein in precellular blastoderm embryos produces abnormal phenotypes with a pattern of segment loss closely resembling that of Kruppel mutant embryos. Immunological staining shows that giant, ectopically expressed from the hsp70 promoter, represses the expression of both the Kruppel and knirps segmentation gap genes. The analysis of the interactions between Kruppel, knirps and giant reveals a network of negative regulation. We show that the apparent positive regulation of knirps by Kruppel is in fact mediated by a negative effect of Kruppel on giant and a negative effect of giant on knirps. giant protein made in bacteria or in embryos binds in vitro to the Kruppel regulatory elements CD1 and CD2 and recognizes a sequence resembling the binding sites of other b-ZIP proteins.