The Drosophila maternal effect mutant, bicaudal (bic), affects the anterior-posterior axis of the embryo. It is incompletely penetrant, producing a variety of lethal embryonic phenotypes, the most severe of which is replacement of the anterior half with a mirror image duplication of the posterior half. Genetic mapping has placed this locus within a region defined by the overlap of two chromosomal deficiencies on the second chromosome. Indirect genetic evidence has suggested that a lethal mutation that maps to the same region, vr22\spP3 may represent a more severe allele of the bicaudal locus. A chromosome walk was performed in this region and over 65 kb of overlapping clones isolated. The location of the P-element insertion responsible for the vr22\spP3 mutation was localized in the walk, and cDNAs corresponding to two adjacent transcription units isolated. These clones have been analyzed and sequenced, and one shows at least a 65% identity with eukaryotic release factor. Recombination work with bicaudal mutant stocks has improved penetrance of the mutation to a level allowing genetic analysis. These stocks were used in genetic rescue experiments to determine the locations of bic and vr22\spP3. The results of genetic rescue and polymorphism mapping provide good evidence that vr22\spP3 and bicaudal are in fact alleles at the same locus, and the gene codes for a protein with strong homology to release factor. The bic protein most likely plays a role in negative regulation of translation of downstream maternal genes such as nanos.