Ventral furrow formation is the first morphogenetic movement to occur during Drosophila gastrulation causing the internalization of mesodermal precursors. A previous proteomic screen for ventral-specific proteome changes identified a set of about forty "difference-proteins" that spanned many cellular functions. To understand the connections between these disparate proteins, we initiated a pathway-building scheme using cycles of protein expression manipulation and proteome analysis. This pathway-building exercise started with the proteasomal subunit, Pros35, one of three proteasome subunits found to be ventral-specific difference-proteins. Here we show that Pros35 is a key regulator in ventral furrow formation. Altering the level of Pros35 led to ventral furrow defects. Proteome analysis of the changes induced by Pros35 RNAi showed extensive overlap with the original set of ventral-specific difference-proteins. One of the most prominent changes was in the extracellular iron carrier, Transferrin (Tsf1). Tsf1 is normally less abundant in ventral cells relative to lateral cells; however, RNAi of Pros35 in ventralized embryos negated this ventral-specific difference. Increasing Tsf1 in wild-type embryos blocked ventral furrow formation and caused proteome changes that were similar to the previously seen ventral-specific difference-proteins, including Pros35, which indicates the existence of an unprecedented regulatory loop between the proteasome and iron homeostasis. Additionally, we show that the iron regulatory protein, Irp-1A, also plays an important role in ventral furrow formation. Together these three proteins are part of a regulatory loop that coordinately controls a large number of ventral-specific protein changes.