The Drosophila melanogaster gene Anaplastic Lymphoma Kinase (Alk) regulates a signal transduction pathway required for founder cell specification within the visceral muscle of the developing embryonic midgut. During embryonic development, the midgut visceral muscle is lined by the endodermal cell layer. In this paper, we have investigated signalling between these two tissues. Here, we show that Alk function is required for decapentaplegic (Dpp) expression and subsequent signalling via the Mad pathway in the developing gut. We propose that not only does Alk signalling regulate founder cell specification and thus fusion in the developing visceral muscle, but that Alk also regulates Dpp signalling between the visceral muscle and the endoderm. This provides an elegant mechanism with which to temporally coordinate visceral muscle fusion and later events in midgut development.