The LIM-homeodomain transcription factor Tailup/Islet1 (Tup) is a key component of cardiogenesis in Drosophila and vertebrates. We report here an additional major role for Drosophila Tup in specifying dorsal muscles. Tup is expressed in the four dorsal muscle progenitors (PCs) and tup-null embryos display a severely disorganized dorsal musculature, including a transformation of the dorsal DA2 into dorsolateral DA3 muscle. This transformation is reciprocal to the DA3 to DA2 transformation observed in collier (col) mutants. The DA2 PC, which gives rise to the DA2 muscle and to an adult muscle precursor, is selected from a cluster of myoblasts transiently expressing both Tinman (Tin) and Col. The activation of tup by Tin in the DA2 PC is required to repress col transcription and establish DA2 identity. The transient, partial overlap between Tin and Col expression provides a window of opportunity to distinguish between DA2 and DA3 muscle identities. The function of Tup in the DA2 PC illustrates how single cell precision can be reached in cell specification when temporal dynamics are combined with positional information. The contributions of Tin, Tup and Col to patterning Drosophila dorsal muscles bring novel parallels with chordate pharyngeal muscle development.