In C. elegans, many mesodermal cell types are made by descendants of the progenitor MS, born at the seven-cell stage of embryonic development. Descendants of MS contribute to body wall muscle and to the posterior half of the pharynx. We have previously shown that MS is specified by the activity of the divergent MED-1,2 GATA factors. We report that the MED-1,2 target gene tbx-35, which encodes a T-box transcription factor, specifies the MS fate. Embryos homozygous for a putative tbx-35-null mutation fail to generate MS-derived pharynx and body muscle, and instead generate ectopic PAL-1-dependent muscle and hypodermis, tissues normally made by the C blastomere. Conversely, overexpression of tbx-35 results in the generation of ectopic pharynx and muscle tissue. The MS and E sister cells are made different by transduction of a Wnt/MAPK/Src pathway signal through the nuclear effector TCF/POP-1. We show that in E, tbx-35 is repressed in a Wnt-dependent manner that does not require activity of TCF/POP-1, suggesting that an additional nuclear Wnt effector functions in E to repress MS development. Genes of the T-box family are known to function in protostomes and deuterostomes in the specification of mesodermal fates. Our results show that this role has been evolutionarily conserved in the early C. elegans embryo, and that a progenitor of multiple tissue types can be specified by a surprisingly simple gene cascade.