TGF beta was originally identified on the basis of its ability to induce phenotypic transformation of non-transformed target cells while activin was discovered as a gonadal protein. They later turned out to be related and both to have possibly crucial roles in the regulation of embryonic development. Here we review the circumstantial and direct evidence for this in the context of our own studies on their expression in and effects on murine EC and ES cells and mouse embryos. Their possible interaction in development is discussed.