In recent years we and others have been attempting to identify the molecular nature of the inducing signals in early Xenopus development. We have found that most members of the fibroblast growth factor (FGF) family are biologically active as mesoderm-inducing factors when applied to ectoderm from blastulae. In addition to this, they will support continued expression of the pan-mesodermal transcription factor Xbra in the mesoderm of gastrula stage embryos. We have studied the expression pattern of four types of FGF in early embryos. Two types (FGF-2 and FGF-9) are expressed maternally and are thus present at the time of natural mesoderm induction. The expression of two other types (FGF-3 and FGF-4) is activated in the newly formed mesoderm of the gastrula. If the activity of the FGF family is inhibited by overexpression of a dominant-negative FGF receptor, there is a reduction in mesoderm formation, there are abnormalities arising from an inhibition of normal gastrulation movements and there is a defect in formation of the posterior parts. We believe that the mesoderm formation and cell movement effects are attributable to loss of Xbra expression, and the posterior defects to lack of posterior HOX gene activity. Overexpression of eFGF gives rise to a posteriorized phenotype, in which posterior HOX genes are expressed in a more anterior position. We conclude that the FGF system has multiple functions in early development, including mesoderm formation, gastrulation movements and anteroposterior patterning.