We have previously demonstrated that activin A at low concentrations induced ventral mesoderm including blood-like cells from Xenopus animal caps and that beating heart could be also induced from animal caps treated with 100 ng/ml activin A, suggesting that activin A might be involved in cardiac vasculogenesis. A vascular endothelial growth factor (VEGF) is a powerful mitogen for endothelial cells and is an inducer and regulator of angiogenesis. However, VEGF function in Xenopus development is not clearly identified. In this study, we determined the effect of VEGF on activin A–induced differentiation of animal cap. The VEGF induced duct-like structure composed of Flk-1–positive cells together with the induction of nonvascular tissues, such as neural tissues. This histological result was coincident with our reverse transcriptase–polymerase chain reaction analysis that VEGF together with activin A promoted the expression of Xenopus N-CAM and Xenopus brachyury. This study suggests that VEGF has additional biological activities besides angiogenesis, and arises a different function that VEGF induces stroma cell migration or recruitment that are required for blood vessel formation. This differentiation system will aid in the understanding of angiogenesis during early development.