We have isolated a novel secreted dorsalizing factor of the neural tube, Xenopus Tiarin, which belongs to the olfactomedin-related family. Tiarin expression starts at the late gastrula stage in the nonneural ectoderm adjacent to the anterior neural plate. Overexpression of Tiarin in the embryo causes expansion of dorsal neural markers and suppression of ventral markers. In the eye-forming field, Tiarin overexpression induces the retinal markers and represses optic stalk markers. Tiarin directly dorsalizes neural tissues in the absence of mesodermal tissues and antagonizes the ventralizing activity of Sonic hedghog (Shh). Unlike BMP4, another dorsalizing factor, Tiarin does not display antineuralizing activity on the ectoderm or mesoderm-ventralizing activity. These findings show that Tiarin is a novel patterning signal candidate acting in the specification of the dorsal neural tube.