Gene expression is regulated pre- and post-transcriptionally via cis-regulatory DNA and RNA motifs. Identification of individual functional instances of such motifs in genome sequences is a major goal for inferring regulatory networks yet has been hampered due to the motifs' short lengths that lead to many chance matches and poor signal-to-noise ratios. In this paper, we develop a general methodology for the comparative identification of functional motif instances across many related species, using a phylogenetic framework that accounts for the evolutionary relationships between species, allows for motif movements, and is robust against missing data due to artifacts in sequencing, assembly, or alignment. We also provide a robust statistical framework for evaluating motif confidence, which enables us to translate evolutionary conservation into a confidence measure for each motif instance, correcting for varying motif length, composition, and background conservation of the target regions. We predict targets of fly transcription factors and miRNAs in alignments of 12 recently sequenced Drosophila species. When compared to extensive genome-wide experimental data, predicted targets are of high quality, matching and surpassing ChIP-chip microarrays and recovering miRNA targets with high sensitivity. The resulting regulatory network suggests significant redundancy between pre- and post-transcriptional regulation of gene expression.