Amphibian mesoderm arises from the marginal zone of the early gastrula and generates various tissues such as notochord, muscle, kidney, and blood. Small changes (twofold) in the amount of microinjected messenger RNA encoding the goosecoid (gsc) homeodomain protein resulted in marked changes in the differentiation of mesoderm in Xenopus laevis. At least three thresholds were observed, which were sufficient to specify four mesodermal cell states. Endogenous gsc messenger RNA was expressed in the marginal zone in a graded fashion that is congruent with a role for this gene in dorso-ventral patterning of mesoderm at the early gastrula stage.