In Xenopus gastrula stage embryos, four isoforms of Tcf1 (B, C, D and E) are present with high amino acid sequence conservation compared to fish, mice and human. We studied possible functional differences between these Tcf1 isoforms during early Xenopus development. After overexpression of single Tcf1 isoforms, two distinct phenotypes were observed. Overexpression of the B or D isoforms of Tcf1, which both lack a C-clamp, enhances early canonical Wnt signaling and induces ectopic dorsal mesoderm at the expense of ventrolateral mesoderm prior to gastrulation, causing severe antero-dorzalization of embryos. Overexpression of the E-isoform, which contains a complete C-clamp, does not induce ectopic dorsal mesoderm, but rather leads to severe caudal truncation. Overexpression of the C-isoform, which contains a partial C-clamp, induces a similar phenotype. Mutation of a single amino acid in the C-clamp, known to produce a hypomorphic mutant in D. melanogaster, led to a gain of function in inducing ectopic organizer tissue, as observed after overexpression of the B or D isoforms of Tcf1. Depletion of the C-clamp exon from the zygotic mRNA pool, by injection of a morpholino oligo that targets the splice acceptor site of the exon containing the C-clamp, caused a severe shortening of the AP-axis. Furthermore, embryos showed poor development of the CNS, paraxial mesoderm and primary blood vessels. In situ hybridization analysis showed that Lef1 expression was downregulated at the mid-hindbrain boundary, in the otic vesicles and the branchial arches. The results indicate that in post-gastrula stage Xenopus embryos, the E-tail of Tcf1 is required for expression of Lef1 and for blood vessel formation.