The primary patterning event in early vertebrate development is the formation of the mesoderm and its subsequent induction of the neural tube. Classic experiments suggest that the vegetal region signals the animal hemisphere to diverge from the pathway of forming ectoderm to form mesoderm such as muscle. Here we show that bovine basic FGF has a limited capacity to induce muscle actin expression in animal hemisphere cells. This level of expression can be raised to levels normally induced in the embryo by another mammalian growth factor, TGF-beta, which by itself will not induce actin expression. We show that the Xenopus embryo contains an mRNA encoding a protein highly homologous to basic FGF. These results together with the identification of a maternal mRNA with strong homology to TGF-beta, suggest that molecules closely related to FGF and TGF-beta are the natural inducers of mesoderm in vertebrate development.