Terminal regions of the early Drosophila embryo are patterned by the highly conserved ERK cascade, giving rise to the nonsegmented terminal structures of the future larva. In less than an hour, this signaling event establishes several gene expression boundaries and sets in motion a sequence of elaborate morphogenetic events. Genetic studies of terminal patterning discovered signaling components and transcription factors that are involved in numerous developmental contexts and deregulated in human diseases. This review summarizes current understanding of signaling and morphogenesis during terminal patterning and discusses several open questions that can now be rigorously investigated using live imaging, omics, and optogenetic approaches. The anatomical simplicity of the terminal patterning system and its amenability to a broad range of increasingly sophisticated genetic perturbations will continue to make it a premier quantitative model for studying multiple aspects of tissue patterning by dynamically controlled cell signaling pathways.