The restriction of Pipe, a potential glycosaminoglycan-modifying enzyme, to ventral follicle cells of the egg chamber is essential for dorsoventral axis formation in the Drosophila embryo. pipe repression depends on the TGFalpha-like ligand Gurken, which activates the Drosophila EGF receptor in dorsal follicle cells. An analysis of Raf mutant clones shows that EGF signalling is required cell-autonomously in all dorsal follicle cells along the anteroposterior axis of the egg chamber to repress pipe. However, the autoactivation of EGF signalling important for dorsal follicle cell patterning has no influence on pipe expression. Clonal analysis shows that also the mirror-fringe cassette suggested to establish a secondary signalling centre in the follicular epithelium is not involved in pipe regulation. These findings support the view that the pipe domain is directly delimited by a long-range Gurken gradient. Pipe induces ventral cell fates in the embryo via activation of the Spätzle/Toll pathway. However, large dorsal patches of ectopic pipe expression induced by Raf clones rarely affect embryonic patterning if they are separated from the endogenous pipe domain. This indicates that potent inhibitory processes prevent pipe dependent Toll activation at the dorsal side of the egg.