Signals released from Spemann's organizer, together with ventralizing factors such as BMPs, are necessary to pattern the dorsoventral axis of the vertebrate embryo. We report that a member of the FGF family, fgf-8, not secreted by the axial mesoderm but expressed in a dorsoventral gradient at the margin of the zebrafish gastrula, also contributes to the establishment of the dorsoventral axis of the embryo. Ectopic expression of FGF-8 leads to the expansion of dorsolateral derivatives at the expense of ventral and posterior domains. Moreover, FGF-8 displays some organizer properties as it induces the formation of a partial secondary axis in the absence of factors released from Spemann's organizer territory. Analysis of its interaction with the ventralizing factors, BMPs, reveals that overexpression of FGF-8 inhibits the expression of these factors in the ventral part of the embryo as early as blastula stage, suggesting that FGF-8 acts upstream of BMP2 and BMP4. We conclude that FGF-8 is involved in defining dorsoventral identity and is an important organizing factor responsible for specification of mesodermal and ectodermal dorsolateral territories of the zebrafish gastrula.