This study analyzes the function of the homeobox gene goosecoid in Xenopus development. First, we find that goosecoid mRNA distribution closely mimics the expected localization of organizer tissue in normal embryos as well as in those treated with LiCl and UV light. Second, goosecoid mRNA accumulation is induced by activin, even in the absence of protein synthesis. It is not affected by bFGF and is repressed by retinoic acid. Lastly, microinjection of goosecoid mRNA into the ventral side of Xenopus embryos, where goosecoid is normally absent, leads to the formation of an additional complete body axis, including head structures and abundant notochordal tissue. The results suggest that the goosecoid homeodomain protein plays a central role in executing Spemann's organizer phenomenon.