Drosophila limbs develop from imaginal discs that are subdivided into compartments. Dorsal-ventral subdivision of the wing imaginal disc depends on apterous activity in dorsal cells. Apterous protein is expressed in dorsal cells and is responsible for (1) induction of a signaling center along the dorsal-ventral compartment boundary (2) establishment of a lineage restriction boundary between compartments and (3) specification of dorsal cell fate. Here, we report that the homeobox gene msh (muscle segment homeobox) acts downstream of apterous to confer dorsal identity in wing development.