In Drosophila, trunk metamerization is established by a cascade of segmentation gene activities: the gap genes, the pair rule genes, and the segment polarity genes. In the anterior head, metamerization requires also gap-like genes and segment polarity genes. However, because the pair rule genes are not active in this part of the embryo, the question on which gene activities are fulfilling the role of the second order regulator genes still remains to be solved. Here we provide first molecular evidence that the Helix-Loop-Helix-COE transcription factor Collier fulfills this role by directly activating the expression of the segment polarity gene hedgehog in the posterior part of the intercalary segment. Collier thereby occupies a newly identified binding site within an intercalary-specific cis-regulatory element. Moreover, we identified a direct physical association between Collier and the basic-leucine-zipper transcription factor Cap'n'collar B, which seems to restrict the activating input of Collier to the posterior part of the intercalary segment and to lead to the attenuation of hedgehog expression in the intercalary lobes at later stages.