The egr-type zinc-finger transcription factor encoded by the Drosophila gene stripe (sr) is expressed in a subset of epidermal cells to which muscles attach during late stages of embryogenesis. We report loss-of-function and gain-of-function experiments indicating that sr activity provides ectodermal cells with properties required for the establishment of a normal muscle pattern during embryogenesis and for the differentiation of tendon-like epidermal muscle attachment sites (EMA). Our results show that sr encodes a transcriptional activator which acts as an autoregulated developmental switch gene. sr activity controls the expression of EMA-specific target genes in cells of ectodermal but not of mesodermal origin. sr-expressing ectodermal cells generate long-range signals that interfere with the spatial orientation of the elongating myotubes.