The linked Mrf4 and Myf5 genes encode two transcription factors essential for the determination and differentiation of skeletal muscle in the embryo. The locus is controlled by a multitude of interdigitated enhancers that activate gene expression at different times and in precisely defined progenitor cell populations. Manipulation of the enhancer–promoter composition of the locus reveals a novel mechanism for the regulation of such a gene cluster. Enhancers, promoters, and a new class of elements we call transcription balancing sequences, which can act as cryptic promoters, exist in a series of equilibria to ensure that enhancers and promoters together produce the highly dynamic and exquisitely specific expression patterns of the two genes. The proposed model depends upon nonproductive interactions between enhancers and both minimal and cryptic promoters, and is distinct from those developed for the β-globin and Hox clusters. Moreover, it provides an explanation for the unexpected phenotypes of the three Mrf4 knockout alleles.