The leading edge (LE) is a single row of cells in the Drosophila embryonic epidermis that marks the boundary between two fields of cells: the amnioserosa and the dorsal ectoderm. LE cells play a crucial role in the morphogenetic process of dorsal closure and eventually form the dorsal midline of the embryo. Mutations that block LE differentiation result in a failure of dorsal closure and embryonic lethality. How LE cells are specified remains unclear. To explore whether LE cells are specified in response to early dorsoventral patterning information or whether they arise secondarily, we have altered the extent of amnioserosa and dorsal ectoderm genetically, and assayed LE cell fate. We did not observe an expansion of LE fate in dorsalized or ventralized mutants. Furthermore, we observed that the LE fate arises as a single row of cells, wherever amnioserosa tissue and dorsal epidermis are physically juxtaposed. Taken together our data indicate that LE formation is a secondary consequence of early zygotic dorsal patterning signals. In particular, proper LE specification requires the function of genes such as u-shaped and hindsight, which are direct transcriptional targets of the early Decapentaplegic/Screw patterning gradient, to establish a competency zone from which LE arises. We propose that subsequent inductive signaling between amnioserosa and dorsal ectoderm restricts the formation of LE to a single row of cells.