The transforming growth factor-beta ligands Nodal, activin, and Vg1 play important roles in mesendoderm induction and patterning during vertebrate embryogenesis. These ligands are believed to transduce the signal through the receptor-activated transcription factors Smad2 and Smad3. However, the roles of smad2/3 genes in development of zebrafish embryos are largely unknown because the presence of multiple smad2/3 genes and their maternal expression have hampered the investigation of their developmental roles. We generated potent and specific dominant-negative forms of zebrafish Smad2, Smad3a, and Smad3b by mutating multiple amino acids. Overexpression of these mutants abolished mesendoderm induction by ectopic Nodal signaling in zebrafish embryos. Expression of dominant-negative smad2/3 abrogated Smad2/3 activities in wild-type embryos and caused various mesendodermal defects similar to those in Nodal-deficient embryos. Smad2/3-deficient cells transplanted into the blastodermal margin of wild-type hosts preferentially differentiated into ectodermal tissues rather than mesendodermal tissues, supporting the idea that response of cells to mesendoderm inducers requires Smad2/3 activities. Interference with Smad2/3 activities in Zoep, Moep, and MZoep mutant embryos resulted in more severe mesendodermal defects. Thus, our data reveal that Nodal signaling and mesendoderm induction depend on Smad2/3 and suggest that transforming growth factor-beta signals other than Nodal also contribute to Smad2/3 signaling and embryonic patterning.