casanova (cas) mutant zebrafish embryos lack endoderm and develop cardia bifida. In a substractive screen for Nodal-responsive genes, we isolated an HMG box-containing gene, 10J3, which is expressed in the endoderm. The cas phenotype is rescued by overexpression of 10J3 and can be mimicked by 10J3-directed morpholinos. Furthermore, we identified a mutation within 10J3 coding sequence that cosegregates with the cas phenotype, clearly demonstrating that cas is encoded by 10J3. Epistasis experiments are consistent with an instructive role for cas in endoderm formation downstream of Nodal signals and upstream of sox17. In the absence of cas activity, endoderm progenitors differentiate into mesodermal derivatives. Thus, cas is an HMG box-containing gene involved in the fate decision between endoderm and mesoderm that acts downstream of Nodal signals.