The myocyte enhancer factor-2 (MEF2) family of transcription factors plays key roles in the activation of muscle structural genes. In Drosophila, MEF2 accumulates at high levels in the embryonic muscles, where it activates target genes throughout the mesoderm. Here, we identify the Transglutaminase gene (Tg; CG7356) as a direct transcriptional target of MEF2 in the cardiac musculature. Tg is expressed in cells forming the inflow tracts of the dorsal vessel, and we identify the enhancer responsible for this expression. The enhancer contains three binding sites for MEF2, and can be activated by MEF2 in tissue culture and in vivo. Moreover, loss of MEF2 function, or removal of the MEF2 binding sites from the enhancer, results in loss of Tg expression. These studies identify a new MEF2 target in the cardiac musculature. These studies provide a possible mechanism for the activation of transglutaminase genes.