SUMMARYThe intermediate mesoderm (IM) is the embryonic source of all kidney tissue in vertebrates. The factors that regulate the formation of the IM are not yet well understood. Through investigations in the chick embryo, the current study identifies and characterizes Vg1/Nodal signaling (henceforth referred to as 'Nodal-like signaling') as a novel regulator of IM formation. Excess Nodal-like signaling at gastrulation stages resulted in expansion of the IM at the expense of the adjacent paraxial mesoderm, whereas inhibition of Nodallike signaling caused repression of IM gene expression. IM formation was sensitive to levels of the Nodal-like pathway co-receptor Cripto and was inhibited by a truncated form of the secreted molecule cerberus, which specifically blocks Nodal, indicating that the observed effects are specific to the Nodal-like branch of the TGFβ signaling pathway. The IM-promoting effects of Nodal-like signaling were distinct from the known effects of this pathway on mesoderm formation and left-right patterning, a finding that can be attributed to specific time windows for the activities of these Nodal-like functions. Finally, a link was observed between Nodal-like and BMP signaling in the induction of IM. Activation of IM genes by Nodal-like signaling required an active BMP signaling pathway, and Nodal-like signals induced phosphorylation of Smad1/5/8, which is normally associated with activation of BMP signaling pathways. We postulate that Nodal-like signaling regulates IM formation by modulating the IM-inducing effects of BMP signaling.