May function as a transcriptional activator protein and may play a key role in the organogenesis of the fat body. Binds a sequence element (5'-[TA]GATAA-3') found in the larval promoters of all known alcohol dehydrogenase (ADH) genes. Acts as a homeotic gene downstream of the terminal gap gene HKB to promote morphogenesis and differentiation of anterior and posterior midgut. Initially observed in the analgen of the anterior and posterior midgut and the cephalic mesoderm. It is found in both the endodermal and mesodermal germ layers and for a brief period during gastrulation it is expressed in the amnioserosa. During germ band retraction it becomes restricted to the fat body. Truncated N-terminus.