In Xenopus, as in all amphibians and possibly in vertebrate embryos in general, mesoderm formation and the establishment of the dorsoventral axis depend on inductive cell interactions. Molecules involved in mesoderm induction include FGF which acts predominantly as a ventrolateral inducer, the TGF-beta homolog activin which can induce all types of mesoderm, and members of the Wnt family which have powerful dorsalizing effects. Early effects of inducer action include the activation of regulatory genes. Among such genes, particular interest is focused on three genes encoding putative transcription factors that are expressed specifically in the Spemann organizer region of the gastrula. Expression of one of these genes, goosecoid, has been shown to be sufficient to elicit the formation of a dorsal axis including head and notochord in the embryo.