Recent studies in mouse suggest that the extraembryonic endoderm has an important role in early embryonic patterning . To analyze whether similar mechanisms operate in other vertebrates, we cloned the zebrafish homologue of Hex, a homeobox gene that is expressed asymmetrically in the mouse visceral endoderm . Early expression of zebrafish hex is restricted to the dorsal portion of the yolk syncytial layer (YSL), an extraembryonic tissue. By the onset of gastrulation, hex is expressed in the entire dorsal half of the YSL, which directly underlies the cells fated to form the neural plate. We show that hex expression is initially regulated by the maternal Wnt pathway and later by a Bmp-mediated pathway. Overexpression experiments of wild-type and chimeric Hex constructs indicate that Hex functions as a transcriptional repressor and its overexpression led to the downregulation of bmp2b and wnt8 expression and the expansion of chordin expression. These findings provide further evidence that the zebrafish YSL is the functional equivalent of the mouse visceral endoderm and that extraembryonic structures may regulate early embryonic patterning in many vertebrates.