Embryonic mesoangioblasts are the in vitro counterpart of vessel-associated progenitors, able to differentiate into different mesoderm cell types. To investigate signals recruiting these progenitors to a skeletal myogenic fate, we developed an in vitro assay, based upon co-culture of E11.5 dorsal aorta (from MLC3F-nLacZ transgenic embryos, expressing nuclear beta galactosidase only in striated muscle) with differentiating C2C12 or primary myoblasts. Under these conditions muscle differentiation from cells originating from the vessel can be quantified by counting the number of beta gal+nuclei. Results indicated that Noggin (but not Follistatin, Chordin or Gremlin) stimulates while BMP2/4 inhibits myogenesis from dorsal aorta progenitors; neutralizing antibodies and shRNA greatly reduce these effects. In contrast, TGF-β1, VEGF, Wnt7A, Wnt3A, bFGF, PDGF-BB and IGF1 have no effect. Sorting experiments indicated that the majority of these myogenic progenitors express the pericyte marker NG2. Moreover they are abundant in the thoracic segment at E10.5 and in the iliac bifurcation at E11.5 suggesting the occurrence of a cranio-caudal wave of competent cells along the aorta. BMP2 is expressed in the dorsal aorta and Noggin in newly formed muscle fibers suggesting that these two tissues compete to recruit mesoderm cells to a myogenic or to a perithelial fate in the developing fetal muscle.