In order to elucidate the molecular mechanisms underlying the posterior axis and tail formation in embryogenesis, the function of Neptune, a zinc-finger transcription factor, in Xenopus laevis embryos was investigated. Injection of neptune mRNA into the animal pole area of embryos resulted in the formation of an additional tail structure that included a neural tube and muscle tissue. This activity required FGF signaling since coinjection of a dominant-negative FGF receptor RNA (XFD) completely blocked the formation of a tail structure. A loss-of-function experiment using a fusion construct of neptune and Drosophila engrailed (en-neptune) RNA showed that endogenous Neptune is necessary for formation of the posterior trunk and tail. Furthermore, activity of Neptune was necessary for the endogenous expression of brachyury and fgf-8 at the late gastrula stage. These findings demonstrate a novel function of Neptune in the process of anterior-posterior axis formation through the FGF and brachyury signaling cascades. An experiment using a combination explant with ventral and dorsal marginal tissues showed that cooperation of these two distinct tissues is important for the tail formation and that expression of Neptune in prospective ventral cells may be involved in the activation of the process of tail formation. Developmental Dynamics 234:63–73, 2005. © 2005 Wiley-Liss, Inc.