The homeobox gene tinman plays a key role in the specification of Drosophila heart progenitors and the visceral mesoderm of the midgut, both of which arise at defined positions within dorsal areas of the mesoderm. Here, we show that in addition to the heart and midgut visceral mesoderm, tinman is also required for the specification of all dorsal body wall muscles. Thus it appears that the precursors of the heart, visceral musculature, and dorsal somatic muscles are all specified within the same broad domain of dorsal mesodermal tinman expression. Locally restricted activities of tinman are also observed during its early, general mesodermal expression, where tinman is required for the activation of the homeobox gene buttonless in precursors of the "dorsal median" (DM) glial cells along the ventral midline. These observations, together with others showing only mild effects of ectopic tinman expression on heart development, indicate that tinman function is obligatory, but not sufficient to determine individual tissues within the mesoderm. Therefore, we propose that tinman has a role in integrating positional information that is provided by intersecting domains of additional regulators and signals, which may include Wingless, Sloppy Paired, and Hedgehog in the dorsal mesoderm and EGF-signaling at the ventral midline. Previous studies have shown that Dpp acts as an inductive signal from dorsal ectodermal cells to induce tinman expression in the dorsal mesoderm, which, in turn, is needed for heart and visceral mesoderm formation. In the present report, we show that Thickveins, a type I receptor of Dpp, is essential for the transmission of Dpp signals into the mesoderm. Constitutive activity of Tkv in the entire mesoderm induces ectopic tinman expression in the ventral mesoderm, and this results in the ectopic formation of heart precursors in a defined area of the ventrolateral mesoderm. We further show that Screw, a second BMP2/4-related gene product, Tolloid, a BMP1-related protein, and the zinc finger-containing protein Schnurri, are required to allow full levels of tinman induction during this process. It is likely that some of these functional and regulatory properties of tinman are shared by tinman-related genes from vertebrates that have similarly important roles in embryonic heart development.