AbstractSpecification of cell identity and the proper functioning of a mature cell depend on precise regulation of gene expression. Both binary ON/OFF regulation of transcription, as well as more fine-tuned control of transcription levels in the ON state, are required to define cell types. The Drosophila melanogaster Hox gene, Ultrabithorax (Ubx), exhibits both of these modes of control during development. While ON/OFF regulation is needed to specify the fate of the developing wing (Ubx OFF) and haltere (Ubx ON), the levels of Ubx within the haltere differ between compartments along the proximal-distal axis. Here, we identify and molecularly dissect the novel contribution of a previously identified Ubx cis-regulatory module (CRM), anterobithorax (abx), to a negative auto-regulatory loop that maintains decreased Ubx expression in the proximal compartment of the haltere as compared to the distal compartment. We find that Ubx, in complex with the known Hox cofactors, Homothorax (Hth) and Extradenticle (Exd), acts through low-affinity Ubx-Exd binding sites to reduce the levels of Ubx transcription in the proximal compartment. Importantly, we also reveal that Ubx-Exd-binding site mutations sufficient to result in de-repression of abx activity in the proximal haltere in a transgenic context are not sufficient to de-repress Ubx expression when mutated at the endogenous locus, suggesting the presence of multiple mechanisms through which Ubx-mediated repression occurs. Our results underscore the complementary nature of CRM analysis through transgenic reporter assays and genome modification of the endogenous locus; but, they also highlight the increasing need to understand gene regulation within the native context to capture the potential input of multiple genomic elements on gene control.Author SummaryOne of the most fundamental questions in biology is how information encoded in the DNA is translated into the diversity of cell-types that exist within a multicellular organism, each with the same genome. Regulation at the transcriptional level, mediated through the activity of transcription factors bound to cis-regulatory modules (CRMs), plays a key role in this process. While we typically distinguish cell-type by the specific subset of genes that are transcriptionally ON or OFF, it is also important to consider the more fine-tuned transcriptional control of gene expression level. We focus on the regulatory logic of the Hox developmental regulator, Ultrabithorax (Ubx), in fruit flies, which exhibits both forms of transcriptional control. While ON/OFF control of Ubx is required to define differential appendage fate in the T2 and T3 thoracic segments, respectively, more fine-tuned control of transcription levels is observed in distinct compartments within the T3 appendage, itself, in which all cells exhibit a Ubx ON state. Through genetic analysis of regulatory inputs, and dissection of a Ubx CRM in a transgenic context and at the endogenous locus, we reveal a compartment-specific negative autoregulatory loop that dampens Ubx transcription to maintain distinct transcriptional levels within a single developing tissue.