The decapentaplegic (dpp) locus of Drosophila melanogaster is a greater than 55 kb genetic unit required for proper pattern formation during the embryonic and imaginal development of the organism. We have proposed that these morphogenetic functions result from the action of a secreted transforming growth factor-beta (TGF-beta)-related protein product encoded by dpp. In this paper we localize 60 mutations on the molecular map of dpp. The positions of these mutations cluster according to phenotypic class, identifying the locations of specific dpp functions. By Northern and cDNA analysis, we characterize five overlapping dpp transcripts. On the basis of the locations of the overlaps relative to a previously sequenced cDNA, it is likely that these transcripts all encode similar or identical polypeptides. We propose that the bulk of dpp DNA consists of extensive arrays of cis-regulatory information. The large (greater than 25-kb) 3' cis-regulatory region represents a novel feature of dpp gene organization