During vertebrate embryogenesis, cells from the paraxial mesoderm coalesce in a rostral-to-caudal progression to form the somites. Subsequent compartmentalization of the somites yields the sclerotome, myotome, and dermatome, which give rise to the axial skeleton, axial musculature, and dermis, respectively. Recently, we cloned a novel basic helix-loop-helix (bHLH) protein, called scleraxis, which is expressed in the sclerotome, in mesenchymal precursors of bone and cartilage, and in connective tissues. Here we report the cloning of a bHLH protein, called paraxis, which is nearly identical to scleraxis within the bHLH region but diverges in its amino and carboxyl termini. During mouse embryogenesis, paraxis transcripts are first detected at about Day 7.5 postcoitum within primitive mesoderm lying posterior to the head and heart primordia. Subsequently, paraxis expression progresses caudally through the paraxial mesoderm, immediately preceding somite formation. Paraxis is expressed at high levels in newly formed somites before the first detectable expression of the myogenic bHLH genes, and as the somite becomes compartmentalized, paraxis becomes downregulated in the myotome. Paraxis and scleraxis are coexpressed in the sclerotome, but paraxis expression declines soon after sclerotome formation, whereas scleroaxis expression increases in the sclerotome and its derivatives. The sequential expression of paraxis and scleraxis in the paraxial mesoderm and somites suggests that these bHLH proteins may comprise part of a regulatory pathway involved in patterning of the paraxial mesoderm and in the establishment of somitic cell lineages.