The ectoderm of early Xenopus gastrula is competent to become induced to neural tissue, but dorsal ectoderm is more neural competent than ventral ectoderm. It is a tenable, but as yet untested possibility that the higher neural competence of dorsal gastrula ectoderm is dependent on the presence of the dorsal mesoderm. To test this hypothesis we overexpressed Xwnt-8 in order to ectopically induce dorsal mesoderm in the ventral side of the embryo. We found that this elevated the level of neural competence of ventral ectoderm to that of dorsal ectoderm. The effect of Xwnt-8 on neural competence of ventral ectoderm was strictly correlated with its ability to enhance the amount of dorsal structures. The data indicate that the presence of dorsal mesoderm is a prerequisite for establishing the differences in neural competence between gastrula dorsal and ventral ectoderm.