The vegetal cells of a Xenopus laevis embryo commit to mesendoderm via the Nodal-signaling pathway. In the direct developing frog Eleutherodactylus coqui, mesendoderm is specified at the marginal zone of the early gastrula, and vegetal core cells transform into nutritional endoderm. Nutritional endoderm, a novel tissue, consists of transient, yolky cells that provide nutrition but remain undifferentiated. We report a dual regulation for the generation of nutritional endoderm. First, differential expressions of the Nodal-signal transducers Smad2 and Smad4 were observed during early gastrulation between the marginal zone and the vegetal core cells. Although EcSmad2 RNA as well as total and activated Smad2 protein were detected in the vegetal core, Smad4 protein was expressed less in vegetal core during early gastrulation. Only 12% and 50% of vegetal core cells were positive for nuclear Smad2 and Smad4 signals respectively compared to 100% of marginal zone cells. These results suggest a signaling disruption in the vegetal core. Second, vegetal core cells were transcriptionally repressed. At the blastula stage, both marginal zone and vegetal core cells were transcriptionally silent, but during early gastrulation, only marginal zone cells became transcriptionally active. This indicates the occurrence of a mid-blastula transition in the marginal zone by early gastrulation, but global transcriptional repression persisted in the vegetal core and its derivative, nutritional endoderm, throughout development. We have described a novel mechanism, which prevents differentiation of the vegetal core through differential Nodal-signaling and global transcriptional repression. J. Exp. Zool. (Mol. Dev. Evol.) 322B: 27–44, 2014. © 2013 Wiley Periodicals, Inc.