Multiple tissue interactions take place during the development of the limb musculoskeletal system. While appendicular myogenesis has been extensively studied, development of connective tissue associated with muscles has received less attention. In the developing Drosophila leg, tendon-like connective tissue arises from clusters of epithelial cells that invaginate into the leg cavity and then elongate to form internal tube-shape structures along which muscle precursors are distributed. Here we show that stripe-positive appendicular precursors of tendon-like connective tissue are set up among intersegmental leg joint cells expressing odd-skipped genes, and that Notch signaling is necessary and locally sufficient to trigger stripe expression. This study also finds that odd-skipped genes and stripe are both required downstream of Notch to promote morphogenesis of tube-shaped internal tendons of the leg.