Nodal-related members of the transforming growth factor (TGF)-beta family r
egulate the induction of mesoderm, endoderm, and mesendoderm, a tissue spec
ific to the Spemann organizer(1-7). How these different tissues form in res
ponse to the same signalling molecules is not completely understood. It has
been suggested that concentration-dependent effects, mediated by extracell
ular cofactors and antagonists, are responsible for the differences(1,8-10)
. Here we show that the nuclear protein Arkadia specifically potentiates th
e mesendoderm-inducing activity of a subset of TGF-beta family members. The
combined activities of Arkadia and Xenopus nodal-related-1 are sufficient
to induce mesendoderm and suppress mesoderm. Arkadia dorsalizes ventral tis
sues, resulting in the induction of organizer-specific gene expression. Blo
cking nodal signalling extracellularly inhibits these effects. Arkadia infl
uences nodal activity when co-expressed and can function in cells adjacent
to those producing the nodal signal. Our findings, together with the observ
ation that Arkadia mutant mice lack a node and node-derived mesendoderm, id
entify Arkadia as an essential modulator of the nodal signalling cascade th
at leads to induction of Spemann's organizer.