EGF-CFC genes encode extracellular proteins that play key roles in intercellular signaling pathways during vertebrate embryogenesis. Mutations in zebrafish and mouse EGF-CFC genes lead to defects in germ-layer formation, anterior–posterior axis orientation and left–right axis specification. In addition, members of the EGF-CFC family have been implicated in carcinogenesis. Although formerly regarded as signaling molecules that are distant relatives of epidermal growth factor (EGF), recent findings indicate that EGF-CFC proteins act as essential cofactors for Nodal, a member of the transforming growth factor β (TGF-β) family. Here, we review molecular genetic evidence from mouse and zebrafish on biological and biochemical roles of the EGF-CFC family, and discuss differing models for EGF-CFC protein function.