Heart induction in Xenopus has been thought to be dependent primarily on the interaction of the heart primordia with the Spemann organizer. We demonstrate, however, that signals derived from the deep dorsoanterior endoderm during early gastrulation are also essential for heart formation. The presence of deep endoderm dramatically enhances heart formation in explants of heart primordia, both in the presence and absence of organizer. Likewise, extirpation of the entire endoderm can decrease the frequency of heart formation in embryos that retain organizer activity. Finally, we show that the combined presence of both endoderm and organizer is necessary and sufficient to induce heart in ventral mesoderm explants that would not otherwise form heart tissue. Xenopus heart induction, therefore, may be a multistep process requiring separate dorsalization and cardiogenic signalling events. This is the first demonstration of a heart-inducing role for the endoderm in Xenopus, indicating that the mechanism of heart formation may be similar in most vertebrates.