The EGF-CFC factor Oep/Cripto1/Frl1 has been implicated in embryogenesis and several human cancers. During vertebrate development, Oep/Cripto1/Frl1 has been shown to act as an essential coreceptor in the TGFbeta/Nodal pathway, which is crucial for germ layer formation. Although studies in cell cultures suggest that Oep/Cripto1/Frl1 is also implicated in other pathways, in vivo it is solely regarded as a Nodal coreceptor. We have found that Rasl11b, a small GTPase belonging to a Ras subfamily of putative tumor suppressor genes, modulates Oep function in zebrafish independently of the Nodal pathway. rasl11b down regulation partially rescues endodermal and prechordal plate defects of zygotic oep(-/-) mutants (Zoep). Rasl11b inhibitory action was only observed in oep-deficient backgrounds, suggesting that normal oep expression prevents Rasl11b function. Surprisingly, rasl11b down regulation does not rescue mesendodermal defects in other Nodal pathway mutants, nor does it influence the phosphorylation state of the downstream effector Smad2. Thus, Rasl11b modifies the effect of Oep on mesendoderm development independently of the main known Oep output: the Nodal signaling pathway. This data suggests a new branch of Oep signaling that has implications for germ layer development, as well as for studies of Oep/Frl1/Cripto1 dysfunction, such as that found in tumors.