We show that mammalian and Xenopus activins induce dorsal axial mesoderm and anterior structures in explants of Xenopus blastula cells that would otherwise form epidermis. The induced explants of animal cap cells can form notochord, muscle, neural tissue, and eyes all arranged in a rudimentary axial pattern. Activin A shares inductive properties and antigenic determinants with PIF, an inducing factor recently isolated from mouse macrophage culture supernatants. Genes encoding Xenopus activin beta A and beta B chains were cloned. Activin beta B transcripts are first detected in Xenopus blastula, whereas activin beta A transcripts do not appear until the late gastrula stage. Recombinant Xenopus activin beta B protein induces mesodermal and neural tissues similar to those induced by mammalian activin A and PIF. Furthermore, ectopic expression of Xenopus activin beta B produces a second body axis in embryos injected with synthetic mRNA. Our results suggest that early induction and axial patterning are accomplished by endogenous activin B, not activin A, in Xenopus.