In neural plate stage Xenopus embryos, XlHbox 8 expression marks anterior endodermal cells fated to develop into pancreas/duodenum, and expression continues in adult pancreas in exocrine duct, acinar, and islet cells. Here, XlHbox 8 is used as a marker in experiments addressing the mechanisms of early endodermal patterning, particularly with respect to the role of specific polypeptide growth factors. When mesoderm-free vegetal explants (VEs) from early blastula stage embryos are cultured in isolation, XlHbox 8 expression develops autonomously in the dorsal region, strongly suggesting that endodermal region-specific determination occurs before MBT. Data from microinjection experiments using RNA encoding the activin and FGF dominant negative receptors and growth factor treatments of isolated VEs suggest that activin positively regulates XlHbox 8 expression, whereas bFGF is a potent negative regulator. Moreover, bFGF induces mesodermal marker expression in VEs. This suggests that the early endodermal determination state is plastic and that elevated levels of bFGF may convert vegetal (endodermal) cells into mesoderm. We propose a model for XlHbox 8 regulation in which an early signal from the Nieuwkoop center (whose eventual fate is endoderm) predisposes dorsovegetal cells for autonomous XlHbox 8 expression, in an area of high local activin (or activin-like) ligand concentration, and low relative concentrations of bFGF.