Net1 is a well-characterized oncoprotein with RhoA-specific GEF activity. Oncogenic Net1, which lacks the first 145 amino acids, is present in the cytosol and contributes to the efficient activation of RhoA and the formation of actin stress fibers in a number of tumor cell types. Meanwhile, wild-type Net1 is predominantly localized in the nucleus at steady state due to its N-terminal nuclear localization sequences, where the function of nuclear Net1 has not been fully determined. Here, we find that zebrafish net1 is expressed specifically in mesendoderm precursors during gastrulation. Endogenous Net1 is located in the nucleus during early embryonic development. Gain-and loss-of-function experiments in zebrafish embryos and mammalian cells demonstrate that, regardless of its GEF activity, nuclear Net1 is critical for zebrafish mesendoderm formation and Nodal signal transduction. Detailed analyses of protein interactions reveal that Net1 associates with Smad2 in the nucleus in a GEF-independent manner, and then promotes Smad2 activation by enhancing recruitment of p300 (also known as EP300) to the transcriptional complex. These findings describe a novel genetic mechanism by which nuclear Net1 facilitates Smad2 transcriptional activity to guide mesendoderm development.