Within the fertilized egg lies the information necessary to generate a diversity of cell types in the precise pattern of tissues and organs that comprises the vertebrate body. Seminal embryological experiments established the importance of induction, or cell interactions, in the formation of embryonic tissues and provided a foundation for molecular studies. In recent years, secreted gene products capable of inducing or patterning embryonic tissues have been identified. Despite these advances, embryologists remain challenged by fundamental questions: What are the endogenous inducing molecules? How is the action of an inducer spatially and temporally restricted? How does a limited group of inducers give rise to diversity of tissues? In this review, the focus is on the induction and patterning of mesodermal and neural tissues in the frog Xenopus laevis, with an emphasis on families of secreted molecules that appear to underlie inductive events throughout vertebrate embryogenesis.