DPP4 (dipeptidyl peptidase-4), a highly conserved transmembrane glycoprotein with an exo-peptidase activity, has been shown to contribute to glucose metabolism, immune regulation, signal transduction, and cell differentiation. Here, we show that DPP4 is involved in control of activin/nodal signaling in Xenopus early development. In support of this, gain of function of DPP4 augmented Smad2 phosphorylation as well as expression of target genes induced by activin or nodal signal. In addition, Dpp4 and Xnr1 showed synergistic effect on induction of ectopic dorsal body axis, when co-injected at suboptimal doses in early embryos. Conversely, saxagliptin, a DPP4 inhibitor repressed activin induction of Smad2 phosphorylation. Notably, overexpression of Dpp4 disrupted specification of dorsal body axis of embryo, leading to malformed phenotypes such as spina bifida and a shortened and dorsally bent axis. Together, these results suggest that DPP4 functions as a potentiator of activin/nodal signaling pathway. [BMB Reports 2018; 51(12): 636-641].