The making of the vertebrate liver occurs in a two step process, beginning with the establishment of competence in the foregut endoderm to respond to signals from cardiac mesoderm, followed by the induction of liver-specific gene expression. Two winged helix transcription factors, Foxa1 and Foxa2, act in concert in hepatic specification. In a mouse model engineered to lack both of these genes in the foregut endoderm, no liver bud is formed and expression of even the earliest known hepatoblast markers does not occur. Furthermore, foregut endoderm derived from double mutant embryos is not responsive to inductive signals in vitro. The Foxa1/Foxa2 model is the first of a completely" liver-less mouse" and provides strong evidence for the competence model of hepatic induction.