The patterning and differentiation of the vertebrate endoderm requires signaling from adjacent tissues. In this report, we demonstrate that signals from the notochord are critical for the development of the hypochord, which is a transient, endodermally derived structure that lies immediately ventral to the notochord in the amphibian and fish embryo. It appears likely that the hypochord is required for the formation of the dorsal aorta in these organisms. We show that removal of the notochord during early neurulation leads to the complete failure of hypochord development and to the elimination of expression of the hypochord marker, VEGF. Removal of the notochord during late neurulation, however, does not interfere with hypochord formation. These results suggest that signals arising in the notochord instruct cells in the underlying endoderm to take on a hypochord fate during early neural stages, and that the hypochord does not depend on further notochord signals for maintenance. In reciprocal experiments, when the endoderm receives excess notochord signaling, a significantly enlarged hypochord develops. Overall, these results demonstrate that, in addition to patterning neural and mesodermal tissues, the notochord plays an important role in patterning of the endoderm.