The endoderm contributes cells to the gut, and participates in the induction and patterning of the vertebrate head and heart. The mechanisms controlling the formation of endoderm are poorly understood. Commitment of endoderm cells occurs at the onset of gastrulation and requires cell interactions; studies in vitro have implicated transforming growth factor Beta (TGF-beta)-related molecules in this process. TARAM-A is a zebrafish receptor kinase that is related to the type I subunit of the TGF-beta receptor, and is expressed in presumptive endomesodermal cells at gastrulation. We provide here evidence for its involvement in endoderm formation in vivo. Activation of TARAM-A was found to drive blastomeres towards an endodermal fate. The induced endoderm behaved ad endogenous endoderm during gastrulation: it migrated in contact with the yolk and expressed endoderm-specific markers. Loss-of-function mutations in the zebrafish one-eyed-pinhead (OEP) gene lead to defects in heart formation, defects of the ventral central nervous system (CNS) and cyclopia. Mutant embryos also lack endoderm and anterior mesoderm. Endoderm formation in oep mutant embryos was found to be restored by the activation of the TARAM-A signaling pathway. Cardiac and ocular defects, but not midline CNS structures, were rescued non-autonomously, demonstrating that endoderm may provide signals that can pattern the eye anlage, and which are distinct form those specifying the ventral midline of the CNS.