We show that, in addition to a role in mesoderm induction during blastula stages, FGF signalling plays an important role in maintaining the properties of the mesoderm in the gastrula of Xenopus laevis. eFGF is a maternally expressed secreted Xenopus FGF with potent mesoderm-inducing activity. However, it is most highly expressed in the mesoderm during gastrulation, suggesting a role after the period of mesoderm induction. eFGF is inhibited by the dominant negative FGF receptor. Embryos overexpressing the dominant negative receptor show a change of behaviour of the dorsal mesoderm such that it moves around the blastopore lip instead of elongating in an antero-posterior direction. In such embryos there is a reduction in Xbra expression during gastrulation. We show that during blastula stages eFGF and Xbra are able to activate the expression of each other, suggesting that they are components of an autocatalytic regulatory loop. Moreover, we show that Xbra expression in isolated gastrula mesoderm cells is maintained by eFGF, suggesting that eFGF continues to regulate the expression of Xbra in the blastopore region. In addition, overexpression of eFGF after the mid-blastula transition results in the up-regulation of Xbra expression during gastrula stages and causes suppression of the head and enlargement of the proctodeum, which is the converse of the posterior reductions of the FGF dominant negative receptor phenotype. These data suggest an important role for eFGF in regulating the expression of Xbra and for the eFGF-Xbra regulatory pathway in the control of mesodermal cell behaviour during gastrula stages.