The anterior-posterior axis of the mouse embryo is established by two distinct organizing centres in the anterior visceral endoderm and the distal primitive streak. These organizers induce and pattern the head and trunk respectively, and have been proposed to be localized through coordinate cell movements that rotate a pre-existing proximal-distal axis. Here we show that correct localization of both head- and trunk-organizing centres requires Cripto, a putative signalling molecule that is a member of the EGF-CFC gene family. Before gastrulation, Cripto is asymmetrically expressed in a proximal-distal gradient in the epiblast, and subsequently is expressed in the primitive streak and newly formed embryonic mesoderm. A Cripto null mutation generated by targeted gene disruption results in homozygous Cripto-/- embryos that mostly consist of anterior neuroectoderm and lack posterior structures, thus resembling a head without a trunk. Notably, markers of the head organizer are located at the distal end of the embryo, whereas markers of the primitive streak are absent or localized to the proximal side. Our results indicate that Cripto signalling is essential for the conversion of a proximal-distal asymmetry into an orthogonal anterior-posterior axis.