Fibroblast growth factors (Fgfs) play important roles in the pattern formation of early vertebrate embryos. We have identified a zebrafish ortholog of human FGF17, named fgf17b. The first phase of fgf17b expression occurs in the blastodermal margin of late blastulae and in the embryonic shield of early gastrulae. The second phase starts after the onset of segmentation, mainly in the presomitic mesoderm and newly formed somites. Injection of fgf17b mRNA into one-cell embryos induces expression of the mesodermal marker no tail (ntl) and rescues ntl expression suppressed by overexpression of lefty1 (lft1). Overexpression of fgf17b dorsalizes zebrafish gastrulae by enhancing expression of chordin (chd), which is an antagonist of the ventralizing signals BMPs. In addition, overexpression of fgf17b posteriorizes the neuroectoderm. Simultaneous knockdown of fgf17b and fgf8 with antisense morpholinos results in reduction of chd and ntl. Knockdown of fgf17b can alleviate inhibitory effect of ectopic expression of fgf3 on otx1. These data together suggest that Fgf17b plays a role in early embryonic patterning. We also demonstrate that fgf17b and fgf8 have stronger mesoderm inducting activity than fgf3, whereas fgf17b and fgf3 have stronger activity in posteriorizing the neuroectoderm than fgf8. Like fgf8, activation of fgf17b expression depends on Nodal signaling.