The Drosophila Single-minded and Tango basic-helix-loop-helix-PAS protein heterodimer controls transcription and embryonic development of the CNS midline cells, while the Trachealess and Tango heterodimer controls tracheal cell and salivary duct transcription and development. Expression of both single-minded and trachealess is highly restricted to their respective cell lineages, however tango is broadly expressed. The developmental control of subcellular localization of these proteins is investigated because of their similarity to the mammalian basic-helix-loop-helix-PAS Aromatic hydrocarbon receptor whose nuclear localization is dependent on ligand binding. Confocal imaging of Single-minded and Trachealess protein localization indicate that they accumulate in cell nuclei when initially synthesized in their respective cell lineages and remain nuclear throughout embryogenesis. Ectopic expression experiments show that Single-minded and Trachealess are localized to nuclei in cells throughout the ectoderm and mesoderm, indicating that nuclear accumulation is not regulated in a cell-specific fashion and unlikely to be ligand dependent. In contrast, nuclear localization of Tango is developmentally regulated; it is localized to the cytoplasm in most cells except the CNS midline, salivary duct, and tracheal cells where it accumulates in nuclei. Genetic and ectopic expression experiments indicate that Tango nuclear localization is dependent on the presence of a basic-helix-loop-helix-PAS protein such as Single-minded or Trachealess. Conversely, Drosophila cell culture experiments show that Single-minded and Trachealess nuclear localization is dependent on Tango since they are cytoplasmic in the absence of Tango. These results suggest a model in which Single-minded and Trachealess dimerize with Tango in the cytoplasm of the CNS midline cells and trachea, respectively, and the dimeric complex accumulates in nuclei in a ligand-independent mode and regulates lineage-specific transcription. The lineage-specific action of Single-minded and Trachealess derives from transcriptional activation of their genes in their respective lineages, not from extracellular signaling.