The Drosophila melanogaster gene Anaplastic lymphoma kinase (Alk) is homologous to mammalian Alk, a member of the Alk/Ltk family of receptor tyrosine kinases (RTKs). We have previously shown that the Drosophila Alk RTK is crucial for visceral mesoderm development during early embryogenesis. Notably, observed Alk visceral mesoderm defects are highly reminiscent of the phenotype reported for the secreted molecule Jelly belly (Jeb). Here we show that Drosophila Alk is the receptor for Jeb in the developing visceral mesoderm, and that Jeb binding stimulates an Alk-driven, extracellular signal-regulated kinase-mediated signalling pathway, which results in the expression of the downstream gene duf (also known as kirre)--needed for muscle fusion. This new signal transduction pathway drives specification of the muscle founder cells, and the regulation of Duf expression by the Drosophila Alk RTK explains the visceral-mesoderm-specific muscle fusion defects observed in both Alk and jeb mutant animals.