Development of the mammalian tooth has been intensively studied as a model system for epithelial/mesenchymal interactions during organogenesis, and progress has been made in identifying key molecules involved in this signaling. We show that activin betaA is expressed in presumptive tooth-germ mesenchyme and is thus a candidate for a signaling molecule in tooth development. Analysis of tooth development in activin betaA mutant embryos shows that incisor and mandibular molar teeth fail to develop beyond the bud stage. Activin betaA is thus an essential component of tooth development. Development of maxillary molars, however, is unaffected in the mutants. Using tissue recombination experiments we show that activin is required in the mesenchyme prior to bud formation and that although activin signaling from mesenchyme to epithelium takes place, mutant epithelium retains its ability to support tooth development. Implantation of beads soaked in activin A, into developing mandibles, is able to completely rescue tooth development from E11.5, but not E12.5 or E13.5, confirming that activin is an early, essential mesenchyme signal required before tooth bud formation. Normal development of maxillary molars in the absence of activin shows a position specific role for this pathway in development of dentition. Functional redundancy with activin B or other TGFbeta family members that bind to activin receptors cannot explain development of maxillary molars in the mutants since the activin-signaling pathway appears not to be active in these tooth germs. The early requirement for activin signaling in the mesenchyme in incisor and mandibular molar tooth germs must be carried-out in maxillary molar mesenchyme by other independent signaling pathways.