Nodal signals induce mesodermal and endodermal progenitors during vertebrate development. To determine the role of Nodal signaling at a genomic level, we isolated Nodal-regulated genes by expression profiling using macroarrays and gene expression databases. Putative Nodal-regulated genes were validated by in situ hybridization screening in wild type and Nodal signaling mutants. 46 genes were identified, raising the currently known number of Nodal-regulated genes to 72. Based on their expression patterns along the dorsoventral axis, most of these genes can be classified into two groups. One group is expressed in the dorsal margin, whereas the other group is expressed throughout the margin. In addition to transcription factors and signaling components, the screens identified several new functional classes of Nodal-regulated genes, including cytoskeletal components and molecules involved in protein secretion or endoplasmic reticulum stress. We found that x-box binding protein-1 (xbp1) is a direct target of Nodal signaling and required for the terminal differentiation of the hatching gland, a specialized secretory organ whose specification is also dependent on Nodal signaling. These results indicate that Nodal signaling regulates not only specification genes but also differentiation genes.