Nodal signaling, mediated through SMAD transcription factors, is necessary for pluripotency maintenance and endoderm commitment. We identified a new motif, termed SMAD complex-associated (SCA), that is bound by SMAD2/3/4 and FOXH1 in human embryonic stem cells (hESCs) and derived endoderm. We demonstrate that two basic helix-loop-helix (bHLH) proteins-HEB and E2A-bind the SCA motif at regions overlapping SMAD2/3 and FOXH1. Furthermore, we show that HEB and E2A associate with SMAD2/3 and FOXH1, suggesting they form a complex at critical target regions. This association is biologically important, as E2A is critical for mesendoderm specification, gastrulation, and Nodal signal transduction in Xenopus tropicalis embryos. Taken together, E proteins are novel Nodal signaling cofactors that associate with SMAD2/3 and FOXH1 and are necessary for mesendoderm differentiation.