Smad family proteins have been identified as mediators of intracellular signal transduction by the transforming growth factor-beta (TGF-beta) superfamily. Each member of the pathway-restricted, receptor-activated Smad family cooperates and synergizes with Smad4, called co-Smad, to transduce the signals. Only Smad4 has been shown able to function as a common partner of the various pathway-restricted Smads in mammals. Here we have identified a novel Smad4-like molecule in Xenopus (XSmad4 beta) as well as a Xenopus homolog of a well established Smad4 (XSmad4 alpha). XSmad4 beta is 70% identical to XSmad4 alpha in amino acid sequence. Both of the Xenopus Smad4s can cooperate with Smad1 and Smad2, the pathway-restricted Smads specific for bone morphogenetic protein and TGF-beta, respectively. However, they show distinct properties in terms of their developmental expression patterns, subcellular localizations, and phosphorylation states. Moreover, XSmad4 beta, but not XSmad4 alpha, has the potent ability to induce ventralization when microinjected into the dorsal marginal region of the 4-cell stage of the embryos. These results suggest that the two Xenopus Smad4s have overlapping but distinct functions.