TCF1 belongs to the family of LEF1/TCF transcription factors that regulate gene expression downstream of Wnt/b-catenin signaling, which is crucial for embryonic development and is involved in adult stem cell regulation and tumor growth. In early Xenopus embryos, tcf1 plays an important role in mesoderm induction and patterning. Foxd3 emerged as a potential tcf1 target gene in a microarray analysis of gastrula stage embryos. Because foxd3 and tcf1 are coexpressed during gastrulation, we investigated whether foxd3 is regulated by tcf1. By using morpholino-mediated knockdown, we show that during gastrulation foxd3 expression is dependent on tcf1. By chromatin immunoprecipitation, we also demonstrate direct interaction of b-catenin/tcf complexes with the foxd3 gene locus. Hence, our results indicate that tcf1 acts as an essential activator of foxd3, which is critical for dorsal mesoderm formation in early embryos.