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ABSTRACT Although fluctuations in transcription factor (TF) dosage are often well tolerated, TF dosage modulation can change the target gene expression dynamics and result in significant non-lethal developmental phenotypes. Using MS2/MCP-mediated quantitative live imaging in early Drosophila embryos, we analyzed how changing levels of the gap gene Krüppel (Kr) affects transcriptional dynamics of the pair-rule gene even-skipped (eve). Halving the Kr dosage leads to a transient posterior expansion of the eve stripe 2 and an anterior shift of stripe 5. Surprisingly, the most significant changes are observed in eve stripes 3 and 4, the enhancers of which do not contain Kr-binding sites. In Kr heterozygous embryos, both stripes 3 and 4 display narrower widths, anteriorly shifted boundaries and reduced mRNA production levels. We show that Kr dosage indirectly affects stripe 3 and 4 dynamics by modulating other gap gene dynamics. We quantitatively correlate moderate body segment phenotypes of Kr heterozygotes with spatiotemporal changes in eve expression. Our results indicate that nonlinear relationships between TF dosage and phenotypes underlie direct TF-DNA and indirect TF-TF interactions.