The dorsal (dl) morphogen has been implicated in the establishment of the embryonic mesoderm, neuroectoderm, and dorsal ectoderm in Drosophila. Here we show that the simultaneous reduction in the levels of dl and any one of several helix-loop-helix (HLH) proteins results in severe disruptions in the formation of mesoderm and neuroectoderm. Certain triple heterozygous combinations essentially lack mesoderm as a result of a block in ventral furrow formation during gastrulation. HLH proteins that have been implicated previously in sex determination and neurogenesis (daughterless, achaete, and scute) are shown to be required for the formation of these embryonic tissues. Evidence is also presented that dl-HLH interactions involve the direct physical association of these proteins in solution mediated by the rel and HLH domains. We discuss the striking parallels in mesoderm formation and sex determination.