Signals from the transforming growth factor beta family members are transmitted in the cell through specific receptor-activated Smads and a common partner Smad4. Two Smad4 genes (alpha and beta/10, or smad4 and smad4.2) have been isolated from Xenopus, and conflicting data are reported for Smad4beta/10 actions in mesodermal and neural induction. To further understand the functions of the Smad4s in early frog development, we analyzed their activities in detail. We report that Smad10 is a mutant form of Smad4beta that harbors a missense mutation of a conserved arginine to histidine in the MH1 domain. The mutation results in enhanced association of Smad10 with the nuclear transcription corepressor Ski and leads to its neural inducing activity through inhibition of bone morphogenetic protein (BMP) signaling. In contrast to Smad10, both Smad4alpha and Smad4beta enhanced BMP signals in ectodermal explants. Using antisense morpholino oligonucleotides (MOs) to knockdown endogenous Smad4 protein levels, we discovered that Smad4beta was required for both activin- and BMP-mediated mesodermal induction in animal caps, whereas Smad4alpha affected only the BMP signals. Neither Smad4 was involved directly in neural induction. Expression of Smad4beta-MO in early frog embryos resulted in reduction of mesodermal markers and defects in axial structures, which were rescued by either Smad4alpha or Smad4beta. Smad4alpha-MO induced only minor deficiency at late stages. As Smad4beta, but not Smad4alpha, is expressed at high levels maternally and during early gastrulation, our data suggest that although Smad4alpha and Smad4beta may have similar activities, they are differentially utilized during frog embryogenesis, with only Smad4beta being essential for mesoderm induction.