Vertebrate mesendoderm specification requires the Nodal signaling pathway and its transcriptional effector FoxH1. However, loss of FoxH1 in several species does not reliably cause the full range of loss-of-Nodal phenotypes, indicating that Nodal signals through additional transcription factors during early development. We investigated the FoxH1-dependent and -independent roles of Nodal signaling during mesendoderm patterning using a novel recessive zebrafish FoxH1 mutation called midway, which produces a C-terminally truncated FoxH1 protein lacking the Smad-interaction domain but retaining DNA-binding capability. Using a combination of gel shift assays, Nodal overexpression experiments, and genetic epistasis analyses, we demonstrate that midway more accurately represents a complete loss of FoxH1-dependent Nodal signaling than the existing zebrafish FoxH1 mutant schmalspur. Maternal-zygotic midway mutants lack notochords, in agreement with FoxH1 loss in other organisms, but retain near wild-type expression of markers of endoderm and various nonaxial mesoderm fates, including paraxial and intermediate mesoderm and blood precursors. We found that the activity of the T-box transcription factor Eomesodermin accounts for specification of these tissues in midway embryos. Inhibition of Eomesodermin in midway mutants severely reduces the specification of these tissues and effectively phenocopies the defects seen upon complete loss of Nodal signaling. Our results indicate that the specific combinations of transcription factors available for signal transduction play critical and separable roles in determining Nodal pathway output during mesendoderm patterning. Our findings also offer novel insights into the co-evolution of the Nodal signaling pathway, the notochord specification program, and the chordate branch of the deuterostome family of animals.