Gene regulatory networks (GRNs) evolve as a result of the coevolutionary processes acting on transcription factors (TFs) and the cis-regulatory modules they bind. The zinc-finger TF zelda (zld) is essential for the maternal-to-zygotic transition (MZT) in Drosophila melanogaster, where it directly binds over thousand cis-regulatory modules to regulate chromatin accessibility. D. melanogaster displays a long germ type of embryonic development, where all segments are simultaneously generated along the whole egg. However, it remains unclear if zld is also involved in the MZT of short-germ insects (including those from basal lineages) or in other biological processes. Here we show that zld is an innovation of the Pancrustacea lineage, being absent in more distant arthropods (e.g. chelicerates) and other organisms. To better understand zld's ancestral function, we thoroughly investigated its roles in a short-germ beetle, Tribolium castaneum, using molecular biology and computational approaches. Our results demonstrate roles for zld not only during the MZT, but also in posterior segmentation and patterning of imaginal disc derived structures. Further, we also demonstrate that zld is critical for posterior segmentation in the hemipteran Rhodnius prolixus, indicating this function predates the origin of holometabolous insects and was subsequently lost in long-germ insects. Our results unveil new roles of zld in different biological contexts and suggest that changes in expression of zld (and probably other major TFs) are critical in the evolution of insect GRNs.