The appearance of bottle cells at the dorsal vegetal/marginal boundary of Xenopus embryos marks the onset of blastopore formation. The conditions leading to this epithelial activity were investigated by inducing bottle cells ectopically in the animal region with VegT or different members of the transforming growth factor (TGF)-beta family. Morphological studies on the ectopic bottle cells indicate their close similarity to the endogenous bottle cells at the dorsal blastopore lip. The subepithelial cells of the induced animal region express mesodermal genes in a pattern reminiscent to that observed on the dorsal lip. Relating this expression pattern to the position of the ectopic bottle cells leads to the conclusion that bottle cells form in regions of high TGF-beta signalling. The specific inhibitory effects of cerberus on ectopically induced bottle cells revealed that nodal related growth factors are the intrinsic signals that elicit bottle cell formation in the normal embryo. In addition, fibroblast growth factor signalling is an essential precondition for this epithelial response as it is for mesoderm formation. We conclude that bottle cell formation in the epithelial layer of the gastrula is closely linked to mesodermal patterning in the subepithelial tissues.