A key issue for understanding the early development of the chordate body plan is how the endoderm induces notochord formation. In the ascidian Ciona, nuclear accumulation of beta-catenin is the first step in the process of endoderm specification. We show that nuclear accumulation of beta-catenin directly activates the gene (Cs-FoxD) for a winged helix/forkhead transcription factor and that this gene is expressed transiently at the 16- and 32-cell stages in endodermal cells. The function of Cs-FoxD, however, is not associated with differentiation of the endoderm itself but is essential for notochord differentiation or induction. In addition, it is likely that the inductive signal that appears to act downstream of Cs-FoxD does not act over a long range. It has been suggested that FGF or Notch signal transduction pathway mediates ascidian notochord induction. Our previous study suggests that Cs-FGF4/6/9 is partially involved in the notochord induction. The present experimental results suggest that the expression and function of Cs-FGF4/6/9 and Cs-FoxD are not interdependent, and that the Notch pathway is involved in B-line notochord induction downstream of Cs-FoxD.