In this paper, we consider a mathematical model for the formation of spatial morphogen territories of two key morphogens: Wingless (Wg) and Decapentaplegic (DPP), involved in leg development of Drosophila. We define a gene regulatory network (GRN) that utilizes autoactivation and cros-sinhibition (modeled by Hill equations) to establish and maintain stable boundaries of gene expression. By computational analysis we find that in the presence of a general activator, neither autoactivation, nor cross-inhibition alone are sufficient to maintain stable sharp boundaries of morphogen production in the leg disc. The minimal requirements for a self-organizing system are a coupled system of two morphogens in which the autoactivation and cross-inhibition have Hill coefficients strictly greater than one. In addition, the GRN modeled here describes the regenerative responses to genetic manipulations of positional identity in the leg disc.