We show here that two functionally redundant Caenorhabditis elegans genes, egl-27 and egr-1, have a fundamental role in embryonic patterning. When both are inactivated, cells in essentially all regions of the embryo fail to be properly organised. Tissue determination and differentiation are unaffected and many zygotic patterning genes are expressed normally, including HOX genes. However, hlh-8, a target of the HOX gene mab-5, is not expressed. egl-27 and egr-1 are members of a gene family that includes MTA1, a human gene with elevated expression in metastatic carcinomas. MTA1 is a component of a protein complex with histone deacetylase and nucleosome remodelling activities. We propose that EGL-27 and EGR-1 function as part of a chromatin regulatory complex required for the function of regional patterning genes.