The Drosophila homolog of c-Jun regulates epithelial cell shape changes during the process of dorsal closure in mid-embryogenesis. Here, mutations in the DFos gene are described. In dorsal closure, DFos cooperates with DJun by regulating the expression of dpp; Dpp acts as a relay signal that triggers cell shape changes and DFos expression in neighboring cells. In addition to the joint requirement of DFos and DJun during dorsal closure, DFos functions independently of DJun during early stages of embryogenesis. These findings demonstrate common and distinct roles of DFos and DJun during embryogenesis and suggest a conserved link between AP-1 (activating protein-1) and TGF-beta (transforming growth factor-beta) signaling during epithelial cell shape changes.