Pax3 is a transcription factor whose expression has been used as a marker of myogenic precursor cells arising in the lateral somite destined to migrate to and populate the limb musculature. Accruing evidence indicates that the embryologic origins of axial and appendicular muscles are distinct, and limb muscle abnormalities in both mice and humans harboring Pax3 mutations support this distinction. The mechanisms by which Pax3 affects limb muscle development are unknown. The tyrosine kinase receptor for hepatocyte growth factor/scatter factor encoded by the c-met protooncogene is also expressed in limb muscle progenitors and, like Pax-3, is required in the mouse for limb muscle development. Here, we show that c-met expression is markedly reduced in the lateral dermomyotome of Splotch embryos lacking Pax3. We show that Pax3 can stimulate c-met expression in cultured cells, and we identify a potential Pax3 binding site in the human c-MET promoter that may contribute to direct transcriptional regulation. In addition, we have found that several cell lines derived from patients with rhabdomyosarcomas caused by a t(2;13) chromosomal translocation activating PAX3 express c-MET, whereas those rhabdomyosarcoma cell lines examined without the translocation do not. These results are consistent with a model in which Pax3 modulates c-met expression in the lateral dermomyotome, a function that is required for the appropriate migration of these myogenic precursors to the limb where the ligand for c-met (hepatocyte growth factor/scatter factor) is expressed at high levels.