In contrast to most Drosophila homeobox genes, which are required during embryogenesis, the rough gene is involved in photoreceptor cell specification in the compound eye. Taking advantage of the viability of null rough alleles and the small size of the rough gene, we have combined in vivo and in vitro mutagenesis to define important functional domains in the rough protein. All missense mutations found to disrupt rough function mapped to highly conserved amino acids in the homeodomain (HD), suggesting that the nature of few, if any, single amino acids outside the HD is critical for rough activity. The analysis of chimeric proteins, in which the whole HD or parts of it were swapped between the rough and Antennapedia (Antp) proteins, revealed that the C-terminus of the rough HD is important for rough activity in vivo. This C-terminal region was also found to be required for the recognition of rough binding sites in vitro. Our data suggest that amino acids located in the C-terminus of the homeodomain may play important roles in selective binding site recognition.