Members of the transforming growth factor β (TGFβ) family of secreted growth factors regulate many embryonic processes. Now, Dunn et al. report (p. 1717) that Smad2 and Smad3, two closely related intracellular effectors of the TGFβ/activin/Nodal receptors, signal cooperatively in a dose-dependent manner to regulate mesoderm formation and patterning in the early mouse embryo. Although Smad2 and Smad3 are often functionally interchangeable, the development of mice lacking Smad2 is severely disrupted, whereas Smad3-deficient mice have only subtle abnormalities. When the researchers genetically manipulated the expression ratio of Smad2 and Smad3,embryos with only one copy of each gene developed normally but loss of Smad3 in the context of one wild-type copy of Smad2 resulted in impaired production of anterior mesendoderm. Smad2;Smad3 double homozygous mutants entirely lacked mesoderm and failed to gastrulate. This provides the first evidence that Smad3 is essential during early post-implantation mouse development.