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To form a complex multicellular organism, stem cells must differentiate into each cell/tissue type along proper spatiotemporal scales. The study of differentiation and organismal development has historically been conducted in prokaryotes due to their genetic and morphological simplicity. Anabaena sp. strain PCC 7120 is a multicellular filamentous cyanobacterium that differentiates a morphologically distinct secondary cell type, the heterocyst, in response to a lack of combined environmental nitrogen. Heterocysts are regularly spaced along filaments and fix atmospheric dinitrogen to maintain organismal viability in its absence. Previous work suggested that the hetZ gene is involved in heterocyst differentiation, but the insertional mutants created produced inconsistent phenotypes, so a specific role was not assigned. In this work, a clean hetZ mutant incapable of heterocyst differentiation was generated and the mutation was complemented with the reintroduction of hetZ alone. Overexpression of hetZ bypassed a mutation of hetR, the master regulator of heterocyst differentiation that controls biological pattern formation, but not a mutation of hetP, a regulator of commitment to a differentiated cell fate, which places hetZ roughly between these processes. A protein-protein interaction study showed that HetZ interacts with both HetR and itself. Assessment of transcriptional fusions between the hetZ, hetR, hetP, and patS (an inhibitor of HetR) promoter regions and GFP, and overexpression of HetR in a hetZ mutant resulted in the differentiation of heterocyst-like cells, together indicated that HetZ may act in concert with HetR as an early regulator of development. Taken together, these data describe a non-linear pathway of regulation leading to heterocyst development governed by both HetR and HetZ.