Mesp encodes a bHLH transcription factor required for specification of the cardiac mesoderm in Ciona embryos. The activities of Macho-1 and beta-catenin, two essential maternal determinants, are required for Mesp expression in the B7.5 blastomeres, which constitute the heart field. The T-box transcription factor Tbx6 functions downstream of Macho-1 as a direct activator of Mesp expression. However, Tbx6 cannot account for the restricted expression of Mesp in the B7.5 lineage since it is expressed throughout the presumptive tail muscles. Here we present evidence that the LIM-homeobox gene Lhx3, a direct target of beta-catenin, is essential for localized Mesp expression. Lhx3 is expressed throughout the presumptive endoderm and B7.5 blastomeres. Thus, the B7.5 blastomeres are the only cells to express sustained levels of the Tbx6 and Lhx3 activators. Like mammalian Lhx3 genes, Ci-Lhx3 encodes two isoforms with distinct N-terminal peptides. The Lhx3a isoform appears to be expressed both maternally and zygotically, while the Lhx3b isoform is exclusively zygotic. Misexpression of Lhx3b is sufficient to induce ectopic Mesp activation in cells expressing Tbx6b. Injection of antisense morpholino oligonucleotides showed that the Lhx3b isoform is required for endogenous Mesp expression. Mutations in the Lhx3 half-site of Tbx6/Lhx3 composite elements strongly reduced the activity of a minimal Mesp enhancer. We discuss the delineation of the heart field by the synergistic action of muscle and gut determinants.