In insects, patterning of the anteroposterior axis relies on exquisite coordination of segmentation gene expression in space and time. And yet, there is also wide variation across species in the timing of segmentation and the geometry of the embryonic fate map. The majority of described species exhibit sequential segmentation during posterior growth. Other species, such as the fly Drosophila melanogaster, specify almost all of their segments simultaneously prior to gastrulation. The dynamics of both sequential segmentation and simultaneous segmentation correlate with the spatiotemporal expression of the "timer" genes caudal, Dichaete and odd-paired, which are expressed sequentially within segmenting tissues. These genes have critical roles in the development of many species; however, even in the extensively studied Drosophila embryo, the regulatory interactions responsible for shaping their expression remain poorly understood. In particular, it is not known whether the timer genes cross-regulate each other, nor why they are differentially expressed between the broad region of the blastoderm that gives rise to the gnathal, thoracic and abdominal segments and the small posterior region that gives rise to the embryonic terminalia. In this work, we investigated these questions using multiplexed fluorescent in situ hybridisation and high resolution confocal imaging of wild-type and mutant Drosophila embryos. First, we re-examined segmentation gene expression in the posterior of the embryo, and discovered that two parasegment-like boundaries are generated sequentially from the terminal region during germband extension and posterior growth. Next, we found that caudal, Dichaete, and odd-paired dynamically cross-regulate each other, and also that they are differentially spatially regulated by the posterior terminal genes. Finally, we formalised the regulatory network we inferred from our data as a logical computational model. Our model qualitatively recapitulated both wild-type development and the mutant phenotypes we had examined. Our findings resolve a decades-long ambiguity over the number of segments formed during Drosophila embryogenesis. In addition, they reveal how dynamic spatial inputs from an extrinsic signalling centre modulate the intrinsic dynamics of a gene regulatory network to generate an essential developmental pattern.