During development, the imaginal wing disc of Drosophila is subdivided into territories separated by developmental boundaries. The best characterized boundaries delimit compartments defined by cell-lineage restrictions. Here, we analyze the formation of a boundary that does not rely on such restrictions, namely, that which separates the notum (body wall) and the wing hinge (appendage). It is known that the homeobox genes of the Iroquois complex (Iro-C) define the notum territory and that the distal limit of the Iro-C expression domain demarks the boundary between the notum and the wing hinge. However, it is unclear how this boundary is established and maintained. We now find that msh, a homeobox gene of the Msx family,is strongly expressed in the territory of the hinge contiguous to the Iro-C domain. Loss- and gain-of-function analyses show that msh maintains Iro-C repressed in the hinge, while Iro-C prevents high level expression of msh in the notum. Thus, a mutual repression between msh and Iro-C is essential to set the limit between the contiguous domains of expression of these genes and therefore to establish and/or maintain the boundary between body wall and wing. In addition, we find that msh is necessary for proper growth of the hinge territory and the differentiation of hinge structures. msh also participates in the patterning of the notum, where it is expressed at low levels.