We have cloned and molecularly characterized the Drosophila gene stripe (sr) required for muscle-pattern formation in the embryo. Through differential splicing, sr encodes two nuclear protein variants which contain a zinc finger DNA-binding domain in common with the early growth response (egr) family of vertebrate transcription factors. The sr transcripts and their protein products are exclusively expressed in the epidermal muscle attachment cells and their ectodermal precursors, but not in muscles or muscle precursors. The results suggest that sr activity induces a subset of ectodermal cells to develop into muscle attachment sites and to provide spatial cues necessary to orient myotubes along the basal surface of the epidermis to their targeted attachment cells.