Three lines of evidence suggest that tail formation in Xenopus is a direct continuation of events initiated during gastrulation. First, the expression of two gene markers, Xbra and Xnot2, can be followed from the blastopore lip into distinct cell populations of the developing tailbud. Second, the tip of the tail retains Spemann's tail organizer activity until late stages of development. Third, lineage studies with the tracer DiI indicate that the cells of the late blastopore are fated to form specific tissues of the tailbud, and that intercalation of dorsal cells continues during tail elongation. In particular, the fate map shows that the tip of the tail is a direct descendant of the late dorsal blastopore lip. Thus, the tailbud is not an undifferentiated blastema as previously thought, but rather consists of distinct cell populations which arise during gastrulation.