Soluble peptide factors have been implicated as the agents responsible for embryonic inductions in vertebrates. Here, a protein (PIF) secreted by a mouse macrophage cell line is shown to change the developmental fate of Xenopus embryonic cells. Exposure to PIF causes presumptive ectodermal explants to form anterior neural and mesodermal tissues, including brain and eye, instead of ciliated epidermis. In addition, the induced tissues are organized into a rudimentary embryonic axis. These results suggest that PIF or a closely related molecule is involved in inducing anterior structures and organizing the frog body plan.