Nodal and Nodal-related factors play fundamental roles in a number of developmental processes, including mesoderm and endoderm formation, patterning of the anterior neural plate, and determination of bilateral asymmetry in vertebrates. pitx2, a paired-like homeobox gene, has been proposed to act downstream of Nodal in the gene cascade providing left-right cues to the developing organs. Here, we report that pitx2 is required early in the Nodal signaling pathway for specification of the endodermal and mesodermal germ layers. We found that pitx2 is expressed very early during Xenopus and zebrafish development and in many regions where Nodal signaling is required, including the presumptive mesoderm and endoderm at the blastula and gastrula stages and the prechordal mesoderm at later stages. In Xenopus embryos, overexpression of pitx2 caused ectopic expression of goosecoid and sox-17 and interfered with mesoderm formation. Overexpression of pitx2 in Xenopus animal cap explants partially mimics the effects of Nodal overexpression, suggesting that pitx2 is a mediator of Nodal signaling during specification of the endoderm and prechordal plate, but not during mesoderm induction. We further demonstrate that pitx2 is induced by Nodal signaling in Xenopus animal caps and that the early expression of zebrafish pitx2 is absent when the Nodal signaling pathway is inactive. Inhibition of pitx2 function using a chimeric EnR-pitx2 blocked specification of the mesoderm and endoderm and caused severe embryonic defects resembling those seen when Nodal signaling is inhibited. Following inhibition of pitx2 function, the fate of ventral vegetal blastomeres was shifted from an endodermal to a more mesodermal fate, an effect that was reversed by wild-type pitx2. Finally, we show that inhibition of pitx2 function interferes with the response of cells to Nodal signaling. Our results provide direct evidence that pitx2 function is required for normal specification of the endodermal and mesodermal germ layers.