During early vertebrate embryogenesis, mesoderm is specified by a signal emanating from prospective endoderm. This signal can respecify Xenopus prospective ectoderm as mesoderm, and can be mimicked by members of the fibroblast growth factor and transforming growth factor-beta families. In other systems, the p21c-ras proto-oncogene product has been implicated in signal transduction for various polypeptide growth factors. We report here that a dominant inhibitory ras mutant blocks the mesoderm-inducing activity of fibroblast growth factor and activin, as well as the endogenous inducing activity of prospective endoderm. A constitutively active ras mutant partially mimics these activities. These results indicate that p21ras may have a central role in the transduction of the mesoderm inductive signal. Basic fibroblast growth factor and activin have emerged as candidates for endogenous mesoderm-inducing molecules. The character of the mesoderm induced by these two factors is overlapping but distinct when assessed both by histological and molecular criteria. The signal transduction pathways used during induction by these factors are unknown. We used messenger RNA microinjection of Xenopus eggs to express a dominant inhibitory mutant ras, p21(Asn 17)Ha-ras, in cells competent to respond to inducing factors to examine the role of p21ras in this response. This mutant, which has a reduced affinity for GTP relative to GDP, blocks a variety of mitogenic signals in 3T3 fibroblasts as well as the differentiation of pheochromocytoma cells in response to nerve growth factor.