We discuss the cellular basis and tissue interactions regulating convergence and extension of the vertebrate body axis in early embryogenesls of Xenopus. Convergence and extension occur in the dorsal mesoderm (prospective notochord and somite) and in the posterior nervous system (prospective hindbrain and spinal cord) by sequential cell intercalations. Several layers of cells intercalate to form a thinner, longer array (radial intercalation) and then cells intercalate in the mediolateral orientation to form a longer, narrower array (mediolateral intercalation). Fluorescence microscopy of labeled mesodermal cells in explants shows that protrusive activity is rapid and randomly directed until the midgastrula stage, when it slows and is restricted to the medial and lateral ends of the cells. This bipolar protrusive activity results in elongation, alignment and mediolateral intercalation of the cells. Mediolateral intercalation behavior (MIB) is expressed in an anterior-posterior and lateral-medial progression in the mesoderm. MIB is first expressed laterally in both somitic and notochordal mesoderm. From its lateral origins in each tissue, MIB progresses medially. If convergence does not bring the lateral boundaries of the tissues closer to the medial cells in the notochordal and somitic territories, these cells do not express MIB. Expression of tissue-specific markers follows and parallels the expression of MIB. These facts argue that MIB and some aspects of tissue differentiation are induced by signals emanating from the lateral boundaries of the tissue territories and that convergence must bring medial cells and boundaries closer together for these signals to be effective. Grafts of dorsal marginal zone epithelium to the ventral sides of other embryos, to ventral explants and to UV-ventralized embryos show that it has a role in organising convergence and extension, and dorsal tissue differentiation among deep mesodermal cells. Grafts of involuting marginal zone to animal cap tissue of the early gastrula shows that convergence and extension of the hindbrain-spinal cord are induced by planar signals from the involuting marginal zone.