The EGF-CFC gene cripto governs anterior-posterior (A-P) axis specification in the vertebrate embryo. Existing models suggest that Cripto facilitates binding of Nodal to an ActRII-activin-like kinase (ALK) 4 receptor complex. Cripto also has a crucial function in cellular transformation that is independent of Nodal and ALK4. However, how ALK4-independent Cripto pathways function in vivo has remained unclear. We have generated cripto mutants carrying the amino acid substitution F78A, which blocks the Nodal-ALK4-Smad2 signaling both in embryonic stem cells and cell-based assays. In cripto(F78A/F78A) mouse embryos, Nodal fails to expand its own expression domain and that of cripto, indicating that F78 is essential in vivo to stimulate Smad-dependent Nodal autoinduction. In sharp contrast to cripto-null mutants, cripto(F78A/F78A) embryos establish an A-P axis and initiate gastrulation movements. Our findings provide in vivo evidence that Cripto is required in the Nodal-Smad2 pathway to activate an autoinductive feedback loop, whereas it can promote A-P axis formation and initiate gastrulation movements independently of its stimulatory effect on the canonical Nodal-ALK4-Smad2 signaling pathway.