The mesoderm of amphibian embryos arises through an inductive interaction in which a signal from the vegetal hemisphere of the blastula-stage embryo acts on overlying equatorial cells. Strong candidates for endogenous mesoderm-inducing signals include members of the fibroblast growth factor (FGF) and activin families. In this paper we show that cells form different mesodermal cell types in response to different concentrations of these factors, and that graded distributions of activin and FGF can, in principle, provide sufficient positional information to generate the body plan of the Xenopus embryo.