Expression of many skeletal muscle-specific genes depends on TEF-1 (transcription enhancer factor-1) and MEF2 transcription factors. In Drosophila, the TEF-1 homolog Scalloped interacts with the cofactor Vestigial to drive differentiation of the wing and indirect flight muscles. Here, we identify three mammalian vestigiallike genes, Vgl-1, Vgl-2, and Vgl-3, that share homology in a TEF-1 interaction domain. Vgl-1 and Vgl-3 transcripts are enriched in the placenta, whereas Vgl-2 is expressed in the differentiating somites and branchial arches during embryogenesis and is skeletal musclespecific in the adult. During muscle differentiation, Vgl-2 mRNA levels increase and Vgl-2 protein translocates from the cytoplasm to the nucleus. In situ hybridization revealed co-expression of Vgl-2 with myogenin in the differentiating muscle of embryonic myotomes but not in newly formed somites prior to muscle differentiation. Like Vgl-1, Vgl-2 interacts with TEF-1. In addition, we show that Vgl-2 interacts with MEF2 in a mammalian two-hybrid assay and that Vgl-2 selectively binds to MEF2 in vitro. Co-expression of Vgl-2 with MEF2 markedly co-activates an MEF2-dependent promoter through its MEF2 element. Overexpression of Vgl-2 in MyoDtransfected 10T 1 ⁄2 cells markedly increased myosin heavy chain expression, a marker of terminal muscle differentiation. These results identify Vgl-2 as an important new component of the myogenic program.Commitment of pluripotent cells to the skeletal muscle lineage involves multiple inductive signals and the hierarchical activation of several transcription factors (1). Differentiation of skeletal muscle cells is coupled to withdrawal from the cell cycle and is accompanied by transcriptional activation of muscle-specific genes. The MyoD family of basic-helix-loop-helix transcription factors, including MyoD, Myf5, myogenin, and MRF4, plays a central role in activating the muscle differentiation program (2). Activation of muscle gene expression by the MyoD family of factors is dependent on their association with members of the MEF2 family of MADS box transcription factors (3). Together, MyoD and MEF2 account for a large part of muscle-specific gene activation. In addition, many muscle genes contain muscle-specific cytidine-adenosine-thymidine cis-elements (5Ј-CATDSH-3Ј) that are also required for musclespecific expression (4, 5). The proteins that bind to these elements belong to the transcription enhancer factor-1 (TEF-1)