The interplay of fibroblast growth factor (FGF) and nodal signaling in the Xenopus gastrula marginal zone specifies distinct populations of presumptive mesodermal cells. Cells in the vegetal marginal zone, making up the presumptive leading edge mesoderm, are exposed to nodal signaling, as evidenced by SMAD2 activation, but do not appear to be exposed to FGF signaling, as evidenced by the lack of MAP kinase (MAPK) activation. However, in the animal marginal zone, activation of both SMAD2 and MAPK occurs. The differential activation of these two signaling pathways in the marginal zone results in the vegetal and animal marginal zones expressing different genes at gastrulation, and subsequently having different fates, with the vegetal marginal zone contributing to ventral mesoderm (e.g. ventral blood island) and the animal marginal zone giving rise to dorsal fates (e.g. notochord and somite). We report here the cloning of a cDNA encoding a novel nuclear protein, Xmenf, that is expressed in the vegetal marginal zone. The expression of Xmenf is induced by nodal signaling and negatively regulated by FGF signaling. Results from animal cap studies indicate that Xmenf plays a role in the pathway of ventral mesoderm induction in the vegetal marginal zone.