Mesoderm induction assays in Xenopus have implicated growth factors such as activin, Vg1, Xwnt-8, and noggin as important in directing the formation of dorsal mesoderm (Spemann's organizer). Because these growth factors are structurally very different, they presumably act through distinct cell surface receptors that initiate different intracellular signaling cascades. A consequence of all of these signaling pathways, however, seems to be the induction of goosecoid (gsc) gene expression. To understand how integration of these different signaling pathways results in formation of Spemann's organizer, we sought to identify growth factor-responsive elements within the gsc promoter. Through microinjection of reporter genes we have identified two cis-acting elements, a distal element (DE) and a proximal element (PE), that are required for activin/BVg1 and Wnt induction, respectively. We have shown that the DE mediates activin induction in the absence of protein synthesis and therefore constitutes the first activin response element identified to interpret transforming growth factor-beta (TGF-beta) superfamily member signaling directly. Using a reporter gene construct containing a multimerized DE, we find that an activin/BVg1-type signaling cascade is active throughout the vegetal hemisphere and marginal zone but not in the animal hemisphere. We demonstrate further that both the distal and proximal elements are essential for high-level transcription of the gsc gene, specifically in dorsal mesoderm, strongly suggesting that establishment of Spemann's organizer requires synergistic input from activin/BVg1-like and Wnt signaling pathways. Finally, mechanisms of establishing the organizer are likely to be conserved throughout vertebrate evolution.