The int-2 proto-oncogene encodes several products related to the fibroblast growth factor (FGF) family. FGFs have been associated with mesoderm induction in the amphibian embryo and int-2 has a distinct pattern of expression throughout development in vertebrates. But evidence for a function of int-2 in embryo-genesis has been lacking. In the mouse embryo, int-2 transcripts have been detected in the rhombencephalon at a developmental stage where classical experiments showed that the induction of the inner ear occurs. This raises the possibility that int-2 may constitute a signal for the induction of the otic vesicle, the primordium of the inner ear. We provide direct evidence for this view by showing that (1) the formation of the otic vesicle is inhibited by antisense oligonucleotides targeted to the secreted form of int-2, and by antibodies against int-2 oncoproteins, and (2) basic FGF (bFGF) can mimic the inductive signal in the absence of the rhombencephalon.