Axial mesendoderm is comprised of prechordal plate and notochord. Lack of a suitable Cre driver has hampered the ability to genetically dissect the requirement for each of these components, or genes expressed within them, to anterior patterning. Here, we have utilized Isl1-Cre to investigate roles of the winged helix transcription factor Foxa2 specifically in prechordal plate and ventral endoderm. Foxa2(loxP/loxP); Isl1-Cre mutants died at 13.5 dpc, exhibiting aberrations in anterior neural tube and forebrain patterning, and in ventral foregut morphogenesis and cardiac fusion. Molecular analysis of Foxa2(loxP/loxP); Isl1-Cre mutants indicated that Foxa2 is required in Isl1 lineages for expression of notochord and dorsal foregut endoderm markers, Shh. Brachyury, and Hlxb9. Our results support a requirement for Foxa2 in prechordal plate for notochord morphogenesis, axial patterning, and patterning of dorsal foregut endoderm. Loss of Foxa2 in ventral endoderm resulted in reduced expression of Sox17, Gata4, and ZO proteins, accounting at least in part for observed lack of foregut fusion, cardia bifida, and increased apoptosis of ventral endoderm.