We show that cells of the dorsal aorta, an early blood vessel, and of the myotome, the first skeletal muscle to form within the somite, derive from a common progenitor in the mouse embryo. This conclusion is based on a retrospective clonal analysis, using a nlaacZ reporter targeted to the alpha-cardiac actin gene. A rare intragenic recombination event results in a functional nlacZ sequence, giving rise to clones of beta-galactosidase-positive cells. Periendothelial and vascular smooth muscle cells of the dorsal aorta are the main cell types labelled, demonstrating that these are clonally related to the paraxial mesoderm-derived cells of skeletal muscle. Rare endothelial cells are also seen in some clones. In younger clones, arising from a recent recombination event, myotomal labelling is predominantly in the hypaxial somite, adjacent to labelled smooth muscle cells in the aorta. Analysis of Pax3(GFP/+) embryos shows that these cells are Pax3 negative but GFP positive, with fluorescent cells in the intervening region between the aorta and the somite. This is consistent with the direct migration of smooth muscle precursor cells that had expressed Pax3. These results are discussed in terms of the paraxial mesoderm contribution to the aorta and of the mesoangioblast stem cells that derive from it.