Establishment of mesodermal tissues in the amphibian body involves a series of inductive interactions probably elicited by a variety of peptide growth factors. Results reported here suggest that mesodermal patterning involves an array of signalling molecules including DVR-4, a TGF-beta-like molecule. We show that ectopic expression of DVR-4 causes embryos to develop with an overall posterior and/or ventral character, and that DVR-4 induces ventral types of mesoderm in animal cap explants. Moreover, DVR-4 overrides the dorsalizing effects of activin. DVR-4 is therefore the first molecule reported both to induce posteroventral mesoderm and to counteract dorsalizing signals such as activin. Possible interactions between these molecules resulting in establishment of the embryonic body plan are discussed.