Wing formation in Drosophila requires interactions between dorsal and ventral cells. We describe a new gene, fringe, which is expressed in dorsal cells and encodes for a novel protein that is predicted to be secreted. Wing margin formation and distal wing outgrowth can be induced by the juxtaposition of cells with and without fringe expression, whether at the normal wing margin, at the boundaries of fringe mutant clones in the dorsal wing, or at sites of fringe misexpression in the ventral wing. By contrast, both loss of fringe expression and uniform fringe expression cause wing loss. These observations suggest that fringe encodes a boundary-specific cell-signaling molecule that is responsible for dorsal-ventral cell interactions during wing development.