Required for imaginal cell differentiation, may be involved in hormonal responsiveness during metamorphosis. Involved in an inhibitory signaling mechanism to determine the number of cells that will form unicellular sprouts in the trachea. Regulated by transcription factor esg. The longer hdc protein is completely functional and the shorter protein carries some function. Expressed in all imaginal cells of the embryo and larvae. Expressed in a subset of tracheal fusion cells from stage 14 to the end of embryogenesis in metameres 2-9, lateral trunk and ventral anastomoses. Readthrough of the terminator UAA occurs between codons for Ala-650 and His-652. Readthrough is not always suppressed as the shorter protein is more abundant.