Inductive interactions subdivide the Drosophila mesoderm into visceral, somatic, and heart muscle precursors. The muscle precursors form organs by executing tissue-specific migrations and cell fusions. We identified a novel gene, jelly belly (jeb), which is required for visceral mesoderm development. jeb encodes a secreted protein that contains an LDL receptor repeat. In jeb mutants, visceral mesoderm precursors form, but they fail to migrate or differentiate normally; no visceral muscles develop. Jeb protein is produced in somatic muscle precursors and taken up by visceral muscle precursors. jeb reveals a signaling process in which somatic muscle precursors support the proper migration and differentiation of visceral muscle cells. Later in embryogenesis, jeb is transcribed in neurons and Jeb protein is found in axons.