The expression of the Xenopus homoeobox gene xhox3 is an early response to mesoderm induction by peptide growth factors and the level of xhox3 expression marks the antero-posterior character of the induced mesoderm. Different peptide growth factors specify different antero-posterior mesodermal cell fates as seen by the level of xhox3 expression and the capacity to induce specific secondary neural/epidermal structures. These factors and homoeobox genes thus form part of the mechanism necessary for establishing antero-posterior polarity in the frog embryo.