While particular combinations of mesodermal signals are known to induce distinct tissue-specific programs in the endoderm, there is little information about the response pathways within endoderm cells that control their specification. We have used signaling inhibitors on embryo tissue explants and whole-embryo cultures as well as genetic approaches to reveal part of an intracellular network by which FGF signaling helps induce hepatic genes and stabilize nascent hepatic cells within the endodermal epithelium. Specifically, we found that hepatic gene induction is elicited by an FGF/MAPK pathway. Although the PI3K pathway is activated in foregut endoderm cells, its inhibition does not block hepatic gene induction in explants; however, it does block tissue growth. We also found that at the onset of hepatogenesis, the FGF/MAPK and PI3K pathways do not crossregulate in the endoderm. The finding of separate pathways for endoderm tissue specification and growth provides insights for guiding cellular regeneration and stem cell differentiation.