The zebrafish T-box transcription factors spadetail (spt) and the brachyury ortholog no tail (ntl) are together essential for posterior mesoderm formation. In addition to being functionally redundant, spt and ntl also genetically interact with zygotic mutant alleles of one-eyed pinhead (Zoep), leading to synergistic mesodermal defects. Here we have used genetic and pharmacological assays to address the mechanism of these interactions. We show that Zoep and ntl are together required upstream of spt expression, accounting for the severity of the mesodermal defects in Zoep;ntl embryos. Since Xenopus brachyury is proposed to regulate fgf expression, and FGF signaling is required for spt expression, we analyzed the involvement of the FGF signaling pathway in these genetic interactions. Using a specific inhibitor of FGFR activity to indirectly assay the strength of FGF signaling in individual embryos, we found that spt and ntl mutant embryos were both hypersensitive to the FGFR inhibitor. This hypersensitivity is consistent with the possibility that Spt and Ntl function upstream of FGF signaling. Furthermore, we show that minor pharmacological or genetic perturbations in FGF signaling are sufficient to dramatically enhance the Zoep mutant phenotype, providing a plausible explanation for why Zoep genetically interacts with spt and ntl. Finally, we show that Zoep and ace/fgf8 function are essential for the formation of all posterior tissues, including spinal cord. Taken together, our data provide strong in vivo support for the regulation of FGF signaling by T-box transcription factors, and the cooperative activity of Oep and FGF signaling during the formation of posterior structures.