We are investigating how Drosophila imaginal disc cells establish and maintain their appendage-specific determined states. We have previously shown that ectopic expression of wingless (wg) induces leg disc cells to activate expression of the wing marker Vestigial (Vg) and transdetermine to wing cells. Here we show that ectopic wg expression non-cell-autonomously induces Vg expression in leg discs and that activated Armadillo, a cytosolic transducer of the Wg signal, cell-autonomously induces Vg expression in leg discs, indicating that this Vg expression is directly activated by Wg signaling. We find that ubiquitous expression of wg in leg discs can induce only dorsal leg disc cells to express Vg and transdetermine to wing. Dorsal leg disc cells normally express high levels of decapentaplegic (dpp) and its downstream target, optomotor-blind (omb). We find that high levels of dpp expression, which are both necessary and sufficient for dorsal leg development, are required for wg-induced transdetermination. We show that dorsalization of ventral leg disc cells, through targeted expression of either dpp or omb, is sufficient to allow wg to induce Vg expression and wing fate. Thus, dpp and omb promote both dorsal leg cell fate as well as transdetermination-competent leg disc cells. Taken together, our results show that the Wg and Dpp signaling pathways cooperate to induce Vg expression and leg-towing transdetermination. We also show that a specific vg regulatory element, the vg boundary enhancer, is required for transdetermination. We propose that an interaction between Wg and Dpp signaling can explain why leg disc cells transdetermine to wing and that our results have implications for normal leg and wing development.