Gli2 and Meox1 are transcription factors that are expressed in the developing somite and play roles in the commitment of cells to the skeletal muscle lineage. To further define their roles in regulating myogenesis, the function of wild type and dominant-negative forms of Gli2 and Meox1 were examined in the context of differentiating P19 stem cells. We found that Gli2 overexpression up-regulated transcript levels of Meox1 and, conversely, Meox1 overexpression resulted in the upregulation of Gli2 transcripts. Furthermore, dominant-negative forms of either Meox1 or Gli2 disrupted the ability of P19 cells to commit to the muscle lineage and to properly express either Gli2 or Meox1, respectively. Finally, Pax3 transcripts were induced by Gli2 overexpression and lost in the presence of either mutants Meox1 or Gli2. Taken together, these results support the existence of a regulatory loop between Gli2, Meox1, and Pax3 that is essential for specification of mesodermal cells into the muscle lineage.