In amphibians, dorsoventral asymmetry is established by cortical rotation, a cytoplasmic rearrangement in the egg which activates a dorsal determinant on one side of the zygote. This determinant has been proposed to be either Vgl, an endodermally derived molecule that can directly induce ectoderm to form dorsal mesoderm, or a member of the Wnt family, which patterns the ectoderm such that it forms dorsal mesoderm in response to ventral inductive signals. In this study, we have investigated whether the endogenous dorsal determinant(s) functions as a direct inducer of dorsal mesoderm (Vg1-like) or whether it acts to pattern the response of ectoderm to inductive signals (Wnt-like). We report here that cortical rotation enhances both the dorsal-inductive activity of endodermal cells and the response of ectodermal cells to endogenous inductive signals and that both of these activities are required for notochord induction in ectoderm/endoderm recombinants. While ectopically expressed Xwnt-8b can substitute for the dorsalizing signals activated in either ectoderm or endoderm, and can allow notochord formation in recombinants, Vg1 alone is not sufficient to induce notochord in ectodermal explants in the absence of signals activated by cortical rotation. Coexpression of Xwnt-8b along with Vg1 restores ectodermal competence to form notochord. Finally, in endodermal explants, ectopically expressed Xwnt-8b, but not Vg1, can divert the fate of ventral endodermal cells along a dorsal pathway. Thus, while Vg1 is most likely required for induction of mesoderm in vivo, our data suggest that a maternal Wnt-like signal acts synergistically with Vg1 to specify a dorsal fate not only in the mesoderm, but also in the endoderm.