Nodal proteins have crucial roles in mesendoderm formation and left-right patterning during vertebrate development. The molecular mechanisms of signal transduction by Nodal and related ligands, however, are not fully understood. In this paper, we present biochemical and functional evidence that the orphan type I serine/threonine kinase receptor ALK7 acts as a receptor for mouse Nodal and Xenopus Nodal-related 1 (Xnr1). Receptor reconstitution experiments indicate that ALK7 collaborates with ActRIIB to confer responsiveness to Xnr1 and Nodal. Both receptors can independently bind Xnr1. In addition, Cripto, an extracellular protein genetically implicated in Nodal signaling, can independently interact with both Xnr1 and ALK7, and its expression greatly enhances the ability of ALK7 and ActRIIB to respond to Nodal ligands. The Activin receptor ALK4 is also able to mediate Nodal signaling but only in the presence of Cripto, with which it can also interact directly. A constitutively activated form of ALK7 mimics the mesendoderm-inducing activity of Xnr1 in Xenopus embryos, whereas a dominant-negative ALK7 specifically blocks the activities of Nodal and Xnr1 but has little effect on other related ligands. In contrast, a dominant-negative ALK4 blocks all mesoderm-inducing ligands tested, including Nodal, Xnr1, Xnr2, Xnr4, and Activin. In agreement with a role in Nodal signaling, ALK7 mRNA is localized to the ectodermal and organizer regions of Xenopus gastrula embryos and is expressed during early stages of mouse embryonic development. Therefore, our results indicate that both ALK4 and ALK7 can mediate signal transduction by Nodal proteins, although ALK7 appears to be a receptor more specifically dedicated to Nodal signaling.