Zebrafish floating head mutant embryos lack notochord and develop somitic muscle in its place. This may result from incorrect specification of the notochord domain at gastrulation, or from respecification of notochord progenitors to form muscle. In genetic mosaics, floating head acts cell autonomously. Transplanted wild-type cells differentiate into notochord in mutant hosts; however, cells from floating head mutant donors produce muscle rather than notochord in wild-type hosts. Consistent with respecification, markers of axial mesoderm are initially expressed in floating head mutant gastrulas, but expression does not persist. Axial cells also inappropriately express markers of paraxial mesoderm. Thus, single cells in the mutant midline transiently co-express genes that are normally specific to either axial or paraxial mesoderm. Since floating head mutants produce some floor plate in the ventral neural tube, midline mesoderm may also retain early signaling capabilities. Our results suggest that wild- type floating head provides an essential step in maintaining, rather than initiating, development of notochord-forming axial mesoderm.