In vitro studies have suggested that proteoglycans facilitate signaling by mammalian growth factors, but genetic evidence supporting this role has been lacking. Here, we characterize the ENU-induced mutation lazy mesoderm (lzme), which disrupts the single mouse gene encoding UDP-glucose dehydrogenase (Ugdh), an enzyme required for the synthesis of the glycosaminoglycan (GAG) side chains of proteoglycans. lzme mutants arrest during gastrulation with defects in migration of mesoderm and endoderm, a phenotype similar to that of mutants in the fibroblast growth factor (Fgf) pathway. Analysis of the expression of molecular markers indicates that Fgf signaling is blocked in lzme mutant embryos. In contrast, signaling by the growth factors Nodal and Wnt3, which are also essential during mouse gastrulation, appears to be normal in lzme embryos. The results demonstrate that proteoglycans are required during mouse gastrulation specifically to promote Fgf signaling.