Only a subset of cleavage stage blastomeres in the Xenopus embryo is competent to contribute cells to the retina; ventral vegetal blastomeres do not form retina even when provided with neuralizing factors or transplanted to the most retinogenic position of the embryo. These results suggest that endogenous maternal factors in the vegetal region repress the ability of blastomeres to form retina. Herein we provide three lines of evidence that two vegetal-enriched maternal factors (VegT, Vg1), which are known to promote endo-mesodermal fates, negatively regulate which cells are competent to express anterior neural and retinal fates. First, both molecules can repress the ability of dorsal-animal retinogenic blastomeres to form retina, converting the lineage from neural/retinal to non-neural ectodermal and endo-mesodermal fates. Second, reducing the endogenous levels of either factor in dorsal-animal retinogenic blastomeres expands expression of neural/retinal genes and enlarges the retina. The dorsal-animal repression of neural/retinal fates by VegT and Vg1 is likely mediated by Sox17alpha and Derriere but not by XNr1. VegT and Vg1 likely exert their effects on neural/retinal fates through at least partially independent pathways because Notch1 can reverse the effects of VegT and Derriere but not those of Vg1 or XNr1. Third, reduction of endogenous VegT and/or Vg1 in ventral vegetal blastomeres can induce a neural fate, but only allows expression of a retinal fate when both BMP and Wnt signaling pathways are concomitantly repressed.