We describe here the cloning of a new member of the TGF-beta family with similarity to the anti-dorsalizing morphogenetic proteins (ADMPs). This new gene, ADMP2, is expressed in a broad band of mesendoderm cells that appear to include the progenitors of the endoderm and the ventral mesoderm. Antisense morpholino oligonucleotide knockdown of ADMP2 results in near-complete disruption of primitive blood and heart development, while the development of other mesoderm derivatives, including pronephros, muscle and lateral plate is not disrupted. Moreover, the development of the primitive blood in ADMP2 knockdown embryos cannot be rescued by BMP. These results suggests that ADMP2 plays an early role in specifying presumptive ventral mesoderm in the leading edge mesoderm, and that ADMP2 activity may be necessary to respond to BMP signaling in the context of ventral mesoderm induction.